WA Property & Casualty flashcards

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

Washington producer license

A Washington insurance producer must be at least 18, complete OIC-approved prelicensing education for the line, pass the licensing exam, submit fingerprints, and pay required fees.

Continuing education requirement

Washington producers complete 24 credit hours every two years, including at least 3 hours of ethics, and must keep completion records available for audit.

Fiduciary premium handling

A producer holding insurer or insured premiums acts as a fiduciary, must keep funds separate from personal funds, and must remit premiums promptly under the agency agreement.

Unfair claims practice

Washington rules prohibit misrepresenting policy provisions, failing to investigate promptly, unreasonably delaying payment, and denying claims without a written explanation of the policy basis.

Cancellation notice period

For most Washington property and casualty policies, an insurer must give at least 20 days' written notice of cancellation or nonrenewal, and at least 10 days' notice for nonpayment of premium.

Washington auto minimum liability

Washington requires minimum liability limits of $25,000 per person and $50,000 per accident for bodily injury and $10,000 per accident for property damage.

Washington workers compensation

Washington is a monopolistic workers' compensation state; most employers obtain coverage through the state Labor & Industries fund or qualify to self-insure rather than buying private workers' compensation insurance.

Pure versus speculative risk

Pure risk involves only loss or no loss and is insurable; speculative risk involves chance of loss or gain and is generally not insurable by standard property-casualty policies.

Insurable interest

Insurable interest is a financial relationship such that the insured benefits from continued existence of the property or person and suffers measurable loss if the insured event occurs.

Principle of indemnity

Indemnity restores the insured to approximately the pre-loss financial position, without allowing profit from loss; policy limits, deductibles, and valuation methods enforce this principle.

Aleatory contract

An aleatory contract exchanges unequal values depending on an uncertain event; the insured pays premium and may receive a much larger claim payment or no payment at all.

Peril versus hazard

A peril is the cause of loss, such as fire or wind; a hazard is a condition that increases the chance or severity of loss, such as oily rags or poor housekeeping.

Negligence elements

Negligence requires a duty owed, breach of that duty, proximate cause, and actual damages; Washington applies pure comparative negligence, reducing recovery by the plaintiff's percentage of fault.

Coinsurance formula

Commercial property coinsurance payment equals the insured loss multiplied by insurance carried divided by insurance required, where required insurance equals the coinsurance percentage times property value, capped by the policy limit.

Actual cash value

Actual cash value is the cost to replace damaged property with new property of like kind and quality minus depreciation; it reflects the property's pre-loss value rather than full replacement cost.

Replacement cost coverage

Replacement cost pays to repair or replace damaged property with new property of comparable kind and quality without deducting depreciation, subject to policy limits and conditions requiring actual repair or replacement.

HO-3 coverage structure

The HO-3 covers the dwelling and other structures on an open-peril basis and personal property on a named-peril basis, with Coverage B typically 10% of Coverage A and Coverage C often 50%.

Mortgagee clause

A mortgagee clause protects the lender's interest in insured property by providing loss payment to the mortgagee, notice of cancellation or nonrenewal, and protection against certain insured acts.

Flood insurance waiting period

National Flood Insurance Program policies generally have a 30-day waiting period before flood coverage takes effect, although exceptions exist for lender-required flood insurance at closing and certain map changes.

Occurrence versus claims-made

An occurrence policy covers injury or damage that occurs during the policy period; a claims-made policy covers claims first made during the policy period, subject to any retroactive date.

Retroactive date

A retroactive date on a claims-made liability policy bars coverage for wrongful acts that occurred before that date, even if the claim is first made during the policy period.

CGL Coverage A

Commercial general liability Coverage A pays sums the insured becomes legally obligated to pay as damages because of bodily injury or property damage caused by an occurrence, subject to policy limits.

General aggregate limit

The general aggregate is the maximum amount an insurer will pay for all covered claims under a CGL policy during the policy period, except claims subject to a separate products-completed operations aggregate.

Additional insured status

Additional insured status extends liability coverage to another party, such as a landlord or general contractor, under the named insured's policy, often by endorsement and usually for liability arising from the named insured's work.

Umbrella versus excess

An umbrella liability policy provides coverage over underlying policies and may drop down to cover gaps; an excess policy typically follows the terms of specified underlying coverage and responds only after those limits exhaust.

Workers compensation exclusive remedy

Workers compensation benefits are the employee's exclusive remedy against the employer for work-related injury, in exchange for no-fault medical and wage-loss benefits; employer's liability covers certain third-party claims.

HO-4 tenant policy

The HO-4 renters policy covers the tenant's personal property on a named-peril basis and provides personal liability and loss-of-use coverage; it does not cover the building itself.

HO-6 condo policy

The HO-6 condominium unit-owner policy covers personal property, liability, and certain building items within the unit, such as fixtures and improvements, while the association insures common elements.

Personal auto policy parts

The personal auto policy contains Part A liability, Part B medical payments or PIP, Part C uninsured/underinsured motorists, and Part D coverage for damage to the insured auto.

Washington PIP coverage

Washington personal auto policies must offer personal injury protection that pays medical, wage-loss, funeral, and essential-services benefits regardless of fault; the insured may waive PIP in writing.

Business income coverage

Business income coverage replaces net income and continuing normal operating expenses during the period of restoration after a covered property loss, until the business resumes normal operations.

Employee dishonesty coverage

Employee dishonesty coverage, a crime insurance form, pays for loss of money, securities, or other property caused by employee theft or fraud, often subject to a per-loss limit and deductible.