Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
69 Cards in this Set
- Front
- Back
|
Proprty is |
Tangible |
|
|
Direct Loss |
Physical destruction.
|
|
|
3 types of Surety Bonds & 1 example |
Construction Judicial Fiduciary (Example: general contractor, bail bondsman, Guardian of a minor.) |
|
|
Construction Surety Bond |
Guarantees work |
|
|
Judicial Surety Bond |
Guarantee of performance |
|
|
Fiduciary Surety Bond |
Person Of trust |
|
|
What is a surety bond |
A contract that Guarantees: the fulfillment of an obligation
|
|
|
Surety Bonds have 3 parties in the contract |
Principal Obligee Guarantor Example: General contractor building stadium, Braves who need stadium built, Allstate) |
|
|
If principal creates a loss that means principal is in |
Default |
|
|
With surety bonds If the principle experiences a loss it means |
the contract is in default, gurantour will pay the obligee the guarantor will subrogate against the principal. (General contractor has a loss, allstate will pay for the fine or fee on insureds behalf. then allstate will continue to collect premium to help pay back what was paid. ) |
|
|
When underweighting checks the Surety bond before binding they are looking for what? |
Character: good moral standing Capacity: good financials Capability: abilty to finish on time. |
|
|
Fidelity bond is |
taken out by employers to cover losses of bad employees.
= Dishonest employees who steal. |
|
|
Who benefits from Fidelity bonds? |
Buisness, Non profits, churchs |
|
|
With a fedelity bond who is the Principle, Obligee and Guarantour |
Principal (employee / Name insured on policy) Obligee (Employer / Who bought bond) Guarantour Allstate wo issues insurance |
|
|
Insurance |
Allows an individual to substitute a small CERTAIN cost for protection against a LARGE UNCERTAIN loss. |
|
|
Transfer of risk is |
we transfer our risk to an insurance company who pools it with large numbers of people to create a risk sharing apparatus called insurance. |
|
|
Imdinification |
to make whole again without a chance of gain. you lose a 97in flat screen you only get a 97' flat screen not a 100' |
|
|
Intangeable insurance |
peace of mind you are covered |
|
|
Tangable coverage |
you get cash when a loss happens to help cover it. |
|
|
RISK |
chance of loss |
|
|
PURE RISK |
only loss no chance of gain. |
|
|
Speculative Risk |
chance for loss and chance for gain, INSURANCE can not be speculative loss! |
|
|
At what point do insurble interest get paid at time of loss? |
Insurable must of had coverage AT THE time of loss. |
|
|
Insurable interest means |
loss had to of been impacted financially. |
|
|
Managing Risk Avoidance |
NO Exposure, not leaving the house |
|
|
Managing risk reduction |
reduce your risk, wear a seatbelt 1/2 as likely to get hurt.
or Put in an alarm you are managing the risk you face |
|
|
What is a deductible? |
the insureds retention of losses |
|
|
Risk Management Retention |
Who participates in there loss, i.e. buying a policy with a large deductible. |
|
|
What is partial participation retention and FULL RETENTION |
FULL RETENTION no insurance doesn't buy any he is on his own. Partial; you get insurance and pay your monthly deductible. |
|
|
What are the 6 types of Insurers |
Mutual Company Stock Company Reciprocal Lloyd's Association Fraternal Government
|
|
|
MUTUAL compnay is owned by who? |
Policy holders own the company |
|
|
Stock compnay is owned by who? |
Owned by stockholders |
|
|
Reciprcal insurer is owned by who? |
organization that sells to a group of its members only p&C insurance policy, Managed by an ATTORNEY IN FACT |
|
|
Loyd of london insured is what |
a marketplace where sindicates can transact insurance. |
|
|
Fraternal insurer sells what |
life insurance |
|
|
Reciprical insurer compnay can also be called what? ( DEF: Organization that sells to a group of its members only p&C insurance policy, Managed by an ATTORNEY IN FACT) |
Assessment organisation. |
|
|
What legislation is in place to regulate state wide? |
Mccorran-Ferguson ACT 1941 |
|
|
When was the fair credit report act done? |
1970's and it is we must ask your permission to pull your credit. |
|
|
Authorized insurance marketing system |
Admitted , Must be granted a certificate to authority by the state |
|
|
UN- Authorized insurance marketing system |
no certificate of authority in the state. |
|
|
If you have to write though a non authorized insurer for our state who do you use? |
Surplus Line Broker. |
|
|
Surplus Line Broker |
someone who can write policy not usually available in state, Using a NON AUTHORIZED INSURER (home office is in another state no certificate of authority ) |
|
|
Solvency and capacity define |
FINAcialy stable. |
|
|
Surplus line risk |
a risk that has been rejected by a min of 3 authorized insurers. |
|
|
E & O stand for |
erros and omittions |
|
|
What is reinsurance |
Reinsurance is what insurance companies buy in case a catastrophe happens, so they dont have to pay all the claims out at once. its a deductible for them in a catastrophe claim situation. I.E. huricane andrew cost 21 billion and made insurance companies in fl go under. they couldn't afford to pay and didn't buy reinsurance. |
|
|
What is the difference in a captive agent and a independent agent |
captive is exclusive to one comapny Independent can sell for multiple companies |
|
|
What is a captive agent? |
exclusive to one company |
|
|
What is an independent agent |
they sell for any company not held to just one |
|
|
Do captive agents own there renewals |
no they do not the company does |
|
|
Do independent agents own there own renewals? |
yes they do own them. and pay the companies they sell them for. |
|
|
Is a submitted application for insurance an OFFER with out a payment of cash down? |
YES |
|
|
An application for insurance with or with out money is not an offer ? t or f |
false it is an offer with or without money.
|
|
|
Who do brokers represent? |
the insured |
|
|
What is the term used to describe terminating a insurance contract at the end of the policy period? |
nonrenewal |
|
|
What is offer and acceptance? |
application + premium amt = offer policy issued = acceptance. |
|
|
Insurble interst |
insured would suffer a financial penalty if a loss occurred. |
|
|
Unilateral Insurance Contract |
promise in exchange for payment. |
|
|
Aleatory Insurance Contract |
1st you must have a loss to have a claim. you can't claim a leaning tree it must fall and make a loss. then that loss must be justified. not dead not weather not lightning |
|
|
What is a named risk? |
wind lighting you can name it |
|
|
Unnamed risk |
anything that can happen that is not named
|
|
|
Difference in named risk and unnamed risk |
named risk will only pay out a claim to what is listed as a sub buy. wind, hail, flood, unnamed is like an animal came in and broke your house. unnamed theirs no policy to cover wild animas. |
|
|
#1 reason policy are voided everyday |
misrepresentation. |
|
|
What is a material fact? |
we ask questions on applications that lead to material facts. I.E. do you own a dog. this is a yes or no answer |
|
|
Why can insurance not be bilateral? |
it has to be promise in exchange for payment it can and will never be promise for a promise. |
|
|
If a tree falls and hits the ground is it covered? what is |
no, only if the tree hits COVERED PROPERTY is it covered. house, fence, shed, but falls on ground help no not covered . |
|
|
insurance policy conditional contract, |
duties wrights and responcibitys of both parties in contract. |
|
|
Waiver and estppel |
give up your right you can not undo that. nor can you exercise that right or privilege.
If you always pay your bill 1 week late the company can not terminate you with out the same past practice, you have made that a normal for him. |
|
|
Legally enforceable promise of only one party |
unilateral. |
