WY Property & Casualty flashcards

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

Pure risk

A situation offering only the chance of loss or no loss, with no possibility of gain; most insurable risks, such as fire or liability, are pure risks.

Speculative risk

A situation involving the chance of loss or gain, such as investing or gambling; it is not insurable because the loss would be intentional.

Insurable interest

A financial stake in property or in a person such that a loss would cause measurable economic harm; in property insurance it must exist at the time of loss.

Indemnity principle

The insured is restored to approximately the pre-loss financial position, no better and no worse; it is why policy limits and actual cash value cap recovery.

Aleatory contract

A contract in which the values exchanged are unequal and depend on chance; the insured may pay premiums and collect nothing, or collect far more than paid.

Contract of adhesion

A policy drafted by the insurer and offered to the applicant on a take-it-or-leave-it basis; ambiguities are construed against the insurer that wrote it.

Subrogation

The insurer's right, after paying a claim, to step into the insured's shoes and recover the loss from the negligent third party who caused it.

Moral hazard

A condition of dishonesty or intent, such as arson or a staged theft, that increases the chance or severity of loss and is difficult to underwrite.

Actual cash value

The replacement cost of damaged property minus depreciation, reflecting its value at the time of loss; used when replacement cost coverage is not purchased.

Replacement cost

The cost to repair or replace damaged property with new property of similar kind and quality, with no deduction for depreciation.

Coinsurance clause

A property clause requiring the insured to carry insurance equal to a stated percentage of the property's value or suffer a proportional reduction in the claim payment.

HO-3 special form

A homeowners form that insures the dwelling and other structures for open perils while covering personal property for named perils only.

Coverage C personal property

Homeowners coverage for the insured's personal property on and away from the residence premises, subject to special dollar limits for items such as jewelry and cash.

Loss of use coverage

Homeowners Coverage D pays additional living expenses, and fair rental value of rented portions, when a covered loss makes the residence premises uninhabitable.

Mortgagee clause

A provision requiring the insurer to pay the lender to the extent of its interest in the property and to notify the lender before canceling the policy.

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.

Negligence

Failure to use the care a reasonable person would use, established by duty, breach of duty, proximate cause, and damages; the basis for most liability claims.

Split limits

Auto liability limits stated separately for bodily injury per person, bodily injury per accident, and property damage, such as 25/50/25.

Combined single limit

One auto liability limit that applies to all bodily injury and property damage arising from a single accident, with no per-person breakdown.

Uninsured motorist coverage

Pays the insured for bodily injury caused by a hit-and-run driver or an at-fault driver with no insurance, up to the coverage limit.

Claims-made policy

Liability coverage triggered by a claim first made during the policy period for a wrongful act occurring on or after the stated retroactive date.

Exclusive remedy

The workers compensation principle that statutory benefits are the employee's only recovery from the employer for a work-related injury, barring most tort suits.

Umbrella policy

Excess liability coverage that pays above underlying auto, general liability, and employers liability limits and may fill gaps in the underlying coverage.

Medical payments coverage

Pays reasonable medical and funeral expenses for an injured person regardless of fault, up to the limit, without requiring a liability claim.

Wyoming Insurance Commissioner

Wyoming's chief insurance regulator, appointed by the Governor to head the Wyoming Department of Insurance, enforcing Title 26 and issuing licenses, rules, and orders.

Wyoming producer license term

Wyoming resident producer licenses are renewed biennially; continuing education and the renewal fee must be completed before expiration to keep authority active.

Wyoming continuing education

Resident producers must complete 24 credit hours of continuing education every two years, including at least 3 hours of ethics, before renewing the license.

Fiduciary premium handling

Premiums and return premiums a producer collects are held in trust for the insurer or insured; commingling them with personal or business funds is prohibited.

Twisting

A misrepresentation or incomplete comparison that induces a policyholder to lapse, surrender, or replace existing coverage to the insured's detriment; an unfair trade practice.

Rebating

Offering an inducement not stated in the policy, such as cash, commissions, or gifts, to persuade a buyer to purchase insurance; prohibited as an unfair trade practice.

Surplus lines insurer

A non-admitted insurer permitted to write Wyoming risks that admitted insurers decline, after the producer documents a diligent search for admitted market coverage.

Wyoming Insurance Guaranty Association

A statutory entity that pays covered claims of policyholders of insolvent member property and casualty insurers, funded by assessments on member insurers.