WI Property & Casualty flashcards

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

Wisconsin OCI

The Office of the Commissioner of Insurance, headed by a commissioner appointed by the governor, regulates insurers, producers, rates, and policy forms in Wisconsin.

Wisconsin CE requirement

Producers must complete 24 credit hours of continuing education every two years, including at least 3 hours of ethics, to keep an active Wisconsin license.

Wisconsin notice of cancellation

Wisconsin law generally requires at least 10 days' written notice to cancel for nonpayment of premium and 60 days' written notice for nonrenewal.

Insurable interest

A financial stake in the subject matter such that the insured benefits from its survival and suffers loss from its destruction; required at inception for property insurance.

Principle of indemnity

Restores the insured to approximately the same financial position held before a loss, no better and no worse, preventing profit from loss and underlying actual cash value settlement.

Adverse selection

The tendency of higher-than-average risks to seek or keep insurance, which can cause underpricing; insurers counter it through underwriting, exclusions, and rating classifications.

Aleatory contract

An insurance contract in which the amounts exchanged by the parties are unequal and depend on chance; a small premium may purchase a large claim payment.

Coinsurance formula

Payment equals the limit carried divided by the limit required, multiplied by the loss, never exceeding the policy limit; the required limit is a stated percentage of value.

Actual cash value

Replacement cost of damaged property minus depreciation, reflecting its value immediately before the loss; used to settle losses unless replacement cost coverage applies.

Mortgagee clause

Gives a lender rights to loss proceeds and to notice of cancellation or nonrenewal; the lender may pay premium to keep the policy in force.

Proof of loss

A sworn statement from the insured detailing the amount, date, cause, and supporting documentation of a claimed loss, submitted within the policy's stated time limit.

HO-3 special form

Provides open-peril coverage on the dwelling and other structures but named-peril coverage on personal property; the most widely used homeowners form.

HO-4 tenants policy

Covers a renter's personal property, personal liability, and loss of use; the building itself is insured by the landlord rather than the tenant.

Coverage D loss of use

Pays additional living expenses above normal living costs, or fair rental value, when a covered loss makes the residence premises uninhabitable.

Homeowners special limits

Standard forms limit $200 for money, $1,500 for securities, $1,500 for theft of jewelry, watches, and furs, and $2,500 for theft of silverware and firearms.

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.

Inland marine coverage

Property insurance designed for goods in transit, property at temporary locations, and bailee exposures, filling gaps left by standard commercial property forms.

Builders risk coverage

Covers buildings under construction, including materials and supplies intended to become part of the structure, usually on a completed value basis until construction is accepted.

Negligence elements

To recover, a claimant must prove duty owed, breach of that duty, proximate cause linking the breach to the injury, and actual damages; all four are required.

Wisconsin comparative negligence

Wisconsin reduces a plaintiff's recovery by the plaintiff's percentage of fault; a plaintiff 51 percent or more at fault recovers nothing.

Vicarious liability

Liability assigned to one person for the negligent acts of another, such as an employer for an employee acting within the scope of employment.

Occurrence vs claims-made

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

CGL Coverage B

Personal and advertising injury liability covering offenses such as libel, slander, wrongful eviction, and infringement of advertising ideas, with its own separate limit.

Fire legal liability

CGL coverage for damage to premises rented to the insured caused by fire or another covered peril, subject to a separate limit such as $50,000.

Wisconsin auto minimums

Drivers must carry at least $25,000 per person and $50,000 per accident bodily injury liability and $10,000 property damage liability to satisfy Wisconsin financial responsibility law.

PAP uninsured motorists

Coverage for bodily injury caused by a hit-and-run driver or an at-fault driver with no insurance; Wisconsin insurers must offer it to personal auto applicants.

Business auto symbol 1

Symbol 1 in the business auto form designates any auto, extending liability coverage to owned, hired, borrowed, and non-owned autos used in the business.

Exclusive remedy doctrine

Workers compensation benefits are the employee's sole remedy against the employer for work-related injury, barring most tort suits in exchange for no-fault benefits.

Workers comp Part One

The statutory coverage part in which the insurer pays all benefits required by the state workers compensation law, with no dollar limit.

Workers comp Part Two

Employers liability coverage that responds to suits not payable under statutory benefits, such as loss of consortium claims, usually with a $100,000 limit.

Umbrella self-insured retention

The dollar amount the insured pays before an umbrella policy responds to a loss not covered by underlying insurance; it does not apply to drop-down losses.

Employee dishonesty coverage

Crime coverage indemnifying the insured for money or property stolen by employees through fraud or dishonest acts, often written on a discovery basis.