VT Property & Casualty flashcards

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

Vermont Department of Financial Regulation

State agency that licenses and regulates Vermont insurers, producers, and adjusters; its commissioner is appointed by the governor and enforces state insurance statutes.

Vermont producer continuing education

Vermont licensed producers must complete 24 hours of approved continuing education every two years, including at least 3 hours dedicated to ethics.

Vermont guaranty association

The Vermont Property and Casualty Insurance Guaranty Association pays covered claims of insolvent member insurers within statutory limits and continues defense of those claims.

Insurable interest in property

The insured must have a financial interest in the property at the time of loss; without that interest the insured cannot collect for damage to the property.

Aleatory contract

An insurance contract in which the values exchanged may be unequal and performance depends on an uncertain event such as a covered loss.

Law of large numbers

A statistical principle holding that predicted loss results become more accurate as the number of similar, independent exposure units in a pool increases.

Coinsurance formula

Payment equals insurance carried divided by insurance required, multiplied by the amount of loss, and never exceeds the policy limit.

Replacement cost valuation

Settles a loss by paying the cost to repair or replace damaged property with new property of like kind and quality, with no depreciation deducted.

Mortgagee clause

Gives a lender the right to receive loss payments, to be named in cancellation notices, and to pay premiums if the insured fails to do so.

Negligence elements

To recover, a claimant must prove a legal duty owed, breach of that duty, proximate cause connecting the breach to the injury, and actual damages.

Absolute liability

Liability imposed without proof of negligence on parties engaged in inherently dangerous activities, such as storing explosives or keeping wild animals.

Supplementary payments

Amounts the liability insurer pays in addition to the limit of liability, including defense costs, bail bond premiums, and lost earnings of the insured.

HO-3 special form

Covers the dwelling and other structures on an open perils basis while personal property is insured only against the perils named in the form.

Coverage D loss of use

Pays additional living expenses and fair rental value when a covered loss makes the residence premises uninhabitable, for the time reasonably needed to repair.

HO-6 unit-owners form

Covers the condominium owner's personal property, building additions and alterations, loss of use, liability, and loss assessment charges levied by the association.

Eighty percent replacement cost condition

The HO-3 dwelling loss settlement pays full replacement cost only if the insurance carried is at least 80 percent of the dwelling's full replacement cost.

Split liability limits

Auto liability limits stated as three numbers, such as 25/50/10, meaning per-person bodily injury, per-accident bodily injury, and property damage.

Newly acquired auto

Under Part D, a newly acquired auto has physical damage coverage for 14 days if the policy already carries collision, otherwise for 4 days.

Part C uninsured motorists

Pays insureds for bodily injury caused by uninsured or underinsured negligent drivers, up to the limits shown in the policy declarations.

Non-owned auto in PAP

A private passenger auto not owned by or furnished for the regular use of the insured that the insured operates with permission, such as a rental car.

Business income coverage

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

Agreed value option

A commercial property option under which the insured and insurer agree on a property value in the declarations and the coinsurance condition is suspended.

Nationwide Marine Definition

The document that defines the types of property and risks eligible for inland marine insurance, including property in transit and mobile equipment.

CGL coverage territory

The United States, its territories and possessions, Puerto Rico, and Canada; injury or damage occurring outside this territory is generally not covered.

Products-completed operations

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

Claims-made retroactive date

A claims-made CGL provision barring coverage for injury or damage that occurred before the retroactive date shown in the declarations.

Business auto symbol 1

The covered auto designation meaning any auto, giving the broadest coverage for owned, hired, and non-owned autos for liability purposes.

BOP eligibility

The businessowners policy is available only to small businesses that satisfy the occupancy, building size, and property value eligibility rules in the form.

Exclusive remedy doctrine

Workers compensation benefits are the employee's sole remedy against the employer for work-related injury, replacing tort suits except for intentional acts.

Experience modification factor

A multiplier applied to workers compensation premium that compares the employer's loss history with the average experience for its classification.

Umbrella drop-down

An umbrella's agreement to pay as primary when a loss is not covered by any underlying policy, subject to a self-insured retention.

Surety bond parties

The three parties are the obligee who requires performance, the principal who must perform, and the surety that guarantees the principal's obligation.