Term
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Definition
| Uncertainty of loss. A risk must be uncertain to be insurable |
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Term
| National Flood Insurance Program (NFIP) |
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Definition
| "Insurance purchased to cover floods, as long as location is on a flood map" |
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Term
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Definition
| "The laws of the state, written by legislature, that regulate insurance companies and agents" |
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Term
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Definition
| "The insured has only a chance for loss, never gain" |
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Term
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Definition
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Term
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Definition
| Classification of risk that is normal (standard = normal) |
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Term
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Definition
| Calssification of risk that is more than the normal acceptable risk (substandard = more) |
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Term
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Definition
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Term
| "Mortgagee, or mortgage holder" |
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Definition
| The lender on a home is called? |
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Term
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Definition
| "An agent becomes ""appointed"" or approved to sell insurance for specific insurance companies" |
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Term
| Commissioner of Insurance |
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Definition
| "In California, an elected official (by the people) who oversees all of the responsibility of the Department of Insurance. Can serve 2 terms (8 yrs)" |
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Term
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Definition
| A person who represents the client in transactions: Property and Casualty only |
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Term
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Definition
| Method used to determine rate based on insured's loss experience |
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Term
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Definition
| The injured party. To whom liability insurance pays claims |
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Term
| Eligibility/Enrollment Period |
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Definition
| Used in life and health group benefits. Period of time and employee can enroll for benefits without having to prove insurability |
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Term
| Disability Income Insurance |
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Definition
| A type of health insurance that pays a monthly income to the insured if he/she is sick or injured and cannot work. Pays partial portion of the income |
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Term
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Definition
| "Life or health insurance provided for large numbers of people who have something in common, such as the same employer" |
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Term
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Definition
| A table that shows the average number of sickness or accidents at various ages |
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Term
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Definition
| Based on best judgment of underwriter in classifying a risk |
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Term
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Definition
| The amount of money the insured paid to the insurer that has not been used to provide coverage for the person |
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Term
| Nonoccupational Disability Income Policy |
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Definition
| A policy that only pays a claim when the disability occurs off the job. Issued to persons with hazardous jobs |
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Term
| Worker's Compensation Insurance |
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Definition
| Insurance purchased by employers to cover their employees in case the worker is hurt on the job |
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Term
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Definition
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Term
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Definition
| Raises premium because small claims are covered |
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Term
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Definition
| Lowers premium because small claims are eliminated |
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Term
| Multiple Employer Trust (MET) |
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Definition
| A legal entity of small business owners grouped together to buy insruance |
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Term
| Coordination of Benefits (COB) |
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Definition
| "Used in health insurance. If a person has more than one health policy, coordination is used to avoid overinsurance or double dipping" |
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Term
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Definition
| Used in health insurance to limit the maximum amount of money the insured would have to pay out of pocket on health claims in any particular year |
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Term
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Definition
| "The larger number of people/items insured, the easier it is to predict the losses of the group (Exposure Units)" |
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Term
| Guaranteed Renewable Insurance Contract |
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Definition
| "A life or health insurance policy that cannot be changed, except for the rate" |
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Term
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Definition
| "Used with large groups where the members change frequently and are not individually named: e.g. Schools, campgrounds, charitable groups" |
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Term
| "Usual, Customary & Reasonable (UCR)" |
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Definition
| In health insurance pays a dollar amount based on normal costs in specific area |
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Term
| Occupational Disability Income Contract |
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Definition
| A disability income policy that will pay benefits whether disabled on the job or off the job |
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Term
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Definition
| Used in disability income health insurance. The time period that benefits are not paid. Also called the waiting period |
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Term
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Definition
| Definition for being totally disabled in a disability income policy. Person cannot perform any occupation he/she is qualified |
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Term
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Definition
| Used in group insurance. Employers require that the employees help pay for their benefit plans by paying part of the premium |
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Term
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Definition
| A health condition or sickness that occurred prior to the issuing of a health policy |
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Term
| Medicare Supplemental Insurance |
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Definition
| Also known as Medi-Gap insurance. Must include core benefits |
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Term
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Definition
| "Making an individual whole, with no opportunity for gain" |
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Term
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Definition
| "A vehicle for hire, transporting people i.e. limousines" |
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Term
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Definition
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Term
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Definition
| All perils except those specifically excluded |
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Term
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Definition
| Where are covered perils listed? |
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Term
| Exclusions found in the cause of loss form |
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Definition
| Exclusions found in the cause of loss form |
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Term
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Definition
| To allow 'substitutions' The insured transfers to right to sue the insurance company |
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Term
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Definition
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Term
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Definition
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Term
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Definition
| A policy that can be terminated |
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Term
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Definition
| Found in property and casualty insurance. A surplus line broker places insurance with a non-admitted insurer |
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Term
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Definition
| Recognized by the Department of Insurance to transact insurande; approved or authorized |
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Term
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Definition
| An insurer that is not licensed to do business in a particular state |
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Term
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Definition
| An insurance company that is organized (incorporated) in the state where it is doing business |
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Term
| Foreign Insurance Company |
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Definition
| An insurance company that is incorporated outside the state where it is conducting business |
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Term
| Errors & Omissions Insurance |
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Definition
| Liability insurance that covers agents and insurance companies if they make mistakes or forget to include something in a contract |
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Term
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Definition
| "In a contract, ""you"" indicates" |
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Term
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Definition
| "In a contract who is ""we""" |
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Term
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Definition
| "Property that can move e.g. furniture, clothes, paintings" |
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Term
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Definition
| "Land, buildings, anthing attached (does not move)" |
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Term
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Definition
| The cost to replace without a deduction for depreciation (not what someone paid for it) |
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Term
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Definition
| Replacement cost minus depreciation = ACV |
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Term
| "Repair, Replace, or ACV" |
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Definition
| The amount a company pays on a damaged or stolen vehicle - whatever is less |
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Term
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Definition
| Selling price (includes profit or mark-up) |
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Term
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Definition
| A life or health insurance plan that an employer provides for employees in which the employee does not pay any part of the premium |
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Term
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Definition
| A specified amount of money that is paid by the insured before the insurer pays any money on a claim |
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Term
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Definition
| A temporary insuring cotnract (written or oral) |
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Term
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Definition
| For what amount can a binder be written |
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Term
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Definition
| A person whose job it is to assess risk and determine classification of the insured |
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Term
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Definition
| Written agreement attached to a policy to add or subtract insurance coverages |
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Term
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Definition
| Things that are not covered |
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Term
| Insuring clause. Also called insuring agreement |
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Definition
| Where does the insurer make promises |
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Term
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Definition
| Where are the rules of the policy |
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Term
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Definition
| "Contract section stating who or what is covered, amount of coverage, policy period, and premium" |
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Term
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Definition
| "Declarations, insuring clause (or agreement) conditions, exclusions" |
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Term
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Definition
| The first loss that occurs. e.g. A fire burns down the store |
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Term
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Definition
| A consequence of a direct loss e.g. A store loses business income after a fire |
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Term
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Definition
| Anything that increases a chance for loss |
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Term
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Definition
| "Distinct characteristic arising from material, structural, or operational features that increase a chance for loss i.e. being next to explosives." |
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Term
| Inherent vice or inherent defect |
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Definition
| "Iron rusting, milk going sour, rubber breaking down are all inherent vices. Bound to happen; cannot insure for these" |
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Term
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Definition
| "Need for a dram shop, liquor, or ""package store""" |
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Term
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Definition
| A wrongful act other than breach of contract or a crime |
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Term
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Definition
| "You can file a claim, but damages are reduced based on that party's negligence" |
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Term
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Definition
| A person cannot file or collect for a claim if he/she is at all negligent |
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Term
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Definition
| Engaged in especially hazardous activities. Also known as strict liability. Activities so dangerous that anyone engaging in them is automatically liable for injuries to a 3rd party |
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Term
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Definition
| "Someone not directly involved, but still held responsible" |
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Term
| "Doctors, architects, lawyers, accountants" |
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Definition
| Who needs professional liability insurance? |
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Term
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Definition
| "What type of coverage? Parking lots, dealerships, and repair garages need" |
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Term
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Definition
| "Share, transfer, avoid, retain, reduce (ways to manage risk)" |
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Term
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Definition
| Distributes the risk among the companies (all admitted insurers) |
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Term
| Designated brush fire or civil unrest areas |
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Definition
| Qualifying areas under FAIR plan |
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Term
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Definition
| "When buying property that is financed, a lender cannot force the purchaser to buy insurance froma particular agent of broker." |
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Term
| Can the mortgagee still collect if the insured burns his house on purpose? |
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Definition
| "Yes, the mortgagee clause is a standard provision" |
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Term
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Definition
| DP-1 DP-2 DP-3 All 3 dwelling forms cover: |
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Term
| "No burglary, no falling objects, and no collapse" |
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Definition
| What are 3 common things not covered by the basic dwelling policy (DP-1) |
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Term
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Definition
| Broad form coverage for personal property of a condo owner |
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Term
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Definition
| How much does an HO policy cover personal property away from the premises? |
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Term
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Definition
| How much coverage does a Dwelling policy give for personal property away from the premises? |
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Term
| What form are HO-3 and HO-5 |
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Definition
| "Both are special. Both cover risk on the dwelling, only HO-5 covers risk on ""C""" |
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Term
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Definition
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Term
| What pays excess liability amounts? When does it pay? What does it not pay? |
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Definition
| "Umbrella, after underlying policy or retention is paid. Liability only; does not cover property" |
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Term
| Section 2 on homeowner's policy includes (1) & (2) |
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Definition
| Liability and medical payments. Paid to others only |
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Term
| What type of form are HO-1 and HO-8 |
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Definition
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Term
| "What type of form are HO-2, HO-4, HO-6" |
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Definition
| Broad forms -- also DP-2 and mobile home policies |
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Term
| Coverage D (personal liens) |
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Definition
| Loss of use e.g. hotel expense after a fire. On HO-3 it's 20% of A |
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Term
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Definition
| "Fire, lightning, and internal expolosion" |
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Term
| Will the insurer cover the cost for sandbagging to protect a home? |
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Definition
| Yes. The insured does not have to bear the cost |
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Term
| What is the penalty for not carrying the amount in a coinsurance clause? (2 parts) |
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Definition
| You become a co-insurer and pay a portion of the loss |
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Term
| """Did"" over ""Should""" |
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Definition
| """Did"" over ""Should"" is a fraction of the loss the company pays. The remaining is paid by the insured DID/SHOULD x LOSS = % Co. Pays" |
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Term
| Is an object falling from an airplane covered? |
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Definition
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Term
| "Dwelling or Homeowners, which has broader coverage" |
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Definition
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Term
| "Basic, Broad, Special: Which has the broadest coverage?" |
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Definition
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Term
| "A, B, and C in a homeowners policy are" |
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Definition
| A= the dwelling B= other structures C= personal property |
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Term
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Definition
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Term
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Definition
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Term
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Definition
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Term
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Definition
| "Liability, medical payments, and uninsured motorist 15/30/5" |
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Term
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Definition
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Term
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Definition
| "Owned autos, other than private passenger vehicles" |
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Term
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Definition
| Specifically described autos |
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Term
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Definition
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Term
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Definition
| Pays the difference between the amount an insurer pays on a totaled car and the amount owed on the loan or lease |
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Term
| How is hitting an animal on the road covered |
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Definition
| OTC (An animal is unpredictable) |
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Term
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Definition
| "Anything causing loss or damage to the car, except collision / upset" |
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Term
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Definition
| "Colliding with another car, an object, or upset (rolling)" |
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Term
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Definition
| Number of days to notify insurer to add collision on a new car when replacing a car that only had liability |
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Term
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Definition
| "Earthquake, flood, hail, theft, hitting an animal, gunshots (no collision or upset)" |
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Term
| Would OTC cover a laptop or briefcase stolen from my car |
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Definition
| Personal property is usually not covered (covered under HO) |
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Term
| Does my insurance cover a rental car |
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Definition
| "Yes, all coverage is enforced same as the autos you have" |
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Term
| Where does a driver have coverage |
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Definition
| "U.S., Canada, and U.S. possessions i.e. Puerto Rico, Guam" |
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Term
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Definition
| Minimum limits for low-cost auto insurance |
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Term
| You have liability only and borrow an car and collide with another. Which pays? |
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Definition
| The borrowed car's insurance is primary |
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Term
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Definition
| "Motorcycles, ATV's (not autos, not mobile equipment) " |
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Term
| Mexican liability endorsement |
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Definition
| Excess liability for accidents within 25 miles of the U.S. border (trips of 10 days or less) |
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Term
| Minimum good driver discount |
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Definition
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Term
| Boat owners insurance covers |
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Definition
| Covers medical payments and injury on a personal boat. Does not cover business use of competitive racing |
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Term
| "Yacht is a personal line, but in structure it is?" |
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Definition
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Term
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Definition
| """Protection and Indemnity"" on ocean marine or yacht" |
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Term
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Definition
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Term
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Definition
| Physical damage to a ship or yacht |
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Term
| Part of protection and indemnity (the liability portion) |
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Definition
| Worker Compensation in a Yacht policy |
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Term
| Buildings under construction and materials are considered |
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Definition
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Term
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Definition
| An endorsement for building code upgrades |
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Term
| Is a building under construction vacant? |
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Definition
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Term
| What percentage must be vacant for a building to be called vacant? |
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Definition
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Term
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Definition
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Term
| Commercial package policy includes |
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Definition
| "Common conditions, Common declarations, and two or more modules equal" |
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Term
| "A, B, and C of commercial PROPERTY" |
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Definition
| "A - the building B - business's personal property C - personal property, of others" |
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Term
| Size limits for builders owners policy |
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Definition
| "Six stories, 100,00 sq. feet on offices 25,000 sq. feet and 3 million dollars gross sales for mercantile space (store)" |
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Term
| "A, B, and C of commercial Liability (CGL) are:" |
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Definition
| A - bodily injury and property damage B-personal and advertising injury C-medical payment |
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Term
| What has a separate aggregate limit under CGL? |
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Definition
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Term
| Unlimited duration for reporting; costs extra |
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Definition
| "Full-tail, optional, or extended coverage on claims made CGL" |
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Term
| What is the mid-tail on claims made CGL |
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Definition
| Provides 5 years coverage for something reported during mini-tail |
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Term
| What is the mini-tail on claims made CGL? |
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Definition
| Automatically gives 60 days to report a claim after the policy period |
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Term
| Do corporations have Absolute Liability |
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Definition
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Term
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Definition
| The first date an occurrence would be covered under a policy claims made CGL |
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Term
| Shortages (only provable theft) |
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Definition
| "Under crime insurance, the employee dishonesty endorsement never covers" |
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