TX General Lines Property and Casualty
Agent Exam Prep
10 homeowners policy conditions apply only to liability coverage - ANS-limit of liability
- payment for loss under Coverage E (personal liability) for damaged resulting from a single
occurrence is limited to personal liability limit specified in the declarations
severability of insurance
- liability coverage applies individually to each insured who must defend against claim or
lawsuits
duties after occurrence: after an occurrence, the named insured must:
- notify insurer or agent in waiting
- cooperate with insurer in handling claim
- promptly forward to the insurer any loss notice, demand, summons, or other legal documents
- help insurer settle claim, facilitate subrogation, attend trial/proceedings, gather evidence,
testify, and obtain witnesses
- give insurer sworn statement of loss and show property (damage to property of others
coverage)
- assume no obligation and make no payment directly to claimants
duties of an injured person (Coverage F)- medical payments to others
payment of claim (Coverage F)- medical payments to others
- when handling claim for medical payments, insurer deals directly with injured party (provides
insurer written proof of claim, needs access to medical reports/records, require injured party to
submit physical exam by chosen doctor, etc.)
suit against insurer
- no one can take legal action against insurer unless party has fully compiled with terms of
policy concerning liability (especially until a court has decided that the insured is legally
responsible for a loss or insurer has agreed to be responsible for the loss)
bankruptcy of an insured
- bankruptcy/insolvency of insured does not release insurer from its contractual obligations
under policy
other insurance
,- homeowners policy pays benefit after any other applicable insurance and before insurance
that specifically provides excess coverage to homeowners policy (umbrella policy)
ex)
Beth is sued by
2 types of covered perils - ANS-named perils
open perils
2 types of insurable property - ANS-real property: land, buildings, and other items (trees,
shrubs, and patios) attached to it; the buildings and how it is constructed
ex) doors, windows, sinks, toilets, etc.
personal property: tangible item other than real property; insured buildings contents (appliances)
& items that can be transported in and out of building as well as unattached items on land
ex) jewelry worn by insured outside the home, cameras brought on vacations, and outdoor patio
furniture
2 types of liability - ANS-strict (absolute) liability
vicarious liability
3 categories of liability coverages - ANS-- business liability coverage to pay damages for which
the insured is legally liable
- supplementary payments to pay expenses associated with claims and lawsuits against insured
- medical expenses arising from accident on insured's premises or involving the insured's
operations
3 common endorsements under homeowners policy - ANS-home business insurance coverage
(HO 07 01)
- unendorsed homeowners policy excludes coverage for most business-related risks --> home
business insurance coverage endorsement extends coverage to certain risk from home
business (coverage for business property, business income, extra expense, personal liability,
a\and medical payments)
to be eligible for coverage under this endorsement, a home business:
- must be owned by the named insured or a partnership, joint venture, or other organization that
is composed only of the named insured and resident family members
- must be operated from the residence premises that are primarily used and designed for private
residential purposes
- cam employ up to 3 persons but cannot exceed $250,000 in gross annual revenue
- cannot involve the manufacture, sale, or distribution of food or personal care products
- coverage for business property, business income, extra expense, personal liability, and
medical payments
,permitted incidental occupancies (HO 04 42)
- narrower than home business insurance coverage endorsement & covers incidental types of
business conducted on residence premises (offices, schools, and studios)
home day care coverage (HO 04 97)
- provides property and liability coverage for home day care center that an insured operates on
residence premises
the insured get this personal liability and medical payments coverage subject to 2 exclusions
for:
- bodily injury or property damage involving horses, motor vehicles, aircraft, hovercraft, or
watercraft
-bodily injury to an employee arising out of the home day care business
personal injury endorsement (HO 24 82)
- only covers "bodily injury" and "property damage", so any type of non-bodily injury such as
personal injury is excluded unless the policy has this endorsement
additional residence rented to others endorseme
3 most common defenses to negligence suit based on plaintiff's conduct - ANS-1) assumption of
risk:
if a plaintiff knowns there is a possibility that they could be injured by their action, and yet
voluntarily expose themselves to that danger anyway, the defendant will not be held liable for
injuries resulting from that exposure (voluntary nature of the plaintiff's conduct)
ex) sports stadium liability claims often involve the assumption of risk defense. Courts have held
that fans who decide to attend a live sporting event are aware of the risk that they may be struck
by baseballs, hockey pucks, automobile parts, and other flying objects and choose to be present
anyway --->
a fan who attends a live sporting event voluntarily assumes a known risk of a foreseeable injury
and the stadium owner or team owner will not be liable if a stray ball, puck, auto part, or other
flying object from the field of play strikes the fan
2) contributory negligence:
"was the plaintiff responsible to any degree for the injury?" --> yes --> plaintiff forfeits their claim
and the defendant is free from liability
3) comparative negligence: negligence of the plaintiff is compared against the negligence of the
defendant
juries assign % corresponding to the degree of fault each party bears for producing the injury -->
the amount the plaintiff's recovery is reduced by the portion of their fault & the defendant is held
liable for their portion of the fault
, ex) the plaintiff was driving 5mi over speed limit through a green light. The defendant (driving
another car) ran the red light, colliding in the intersection. The plaintiff was injured, resulting in
$100,000 in damages.
Under traditional rule of contributory negligence, the fact that the plaintiff was speeding would
have meant that he could not recover anything from the defendant
under the comparative negligence doctrine, however, a jury might assign 30%of fault
4 basic types of building construction - ANS-frame: one with interior and exterior walls of
combustible material
(because it's all combustible material, it has the greatest risk of fire --> charged higher fire
insurance premium than masonry veneer or solid masonry building)
- wood
- stucco or plaster on wood
- aluminum or plastic siding
masonry veneer: combustible frame and interior walls but an outside veneer (layer) of brick or
stone
masonry:
(susceptible to earth movement damage --> higher premium for earthquake coverage)
- adobe
- brick
- concrete
- gypsum block
- hollow concrete block
- stone
- tile
superior (noncombustible or fire-resistive): most durable
- noncombustible:
exterior walls, floors, and roof are constructed of and supported by metal, cement, or other
noncombustible materials
- masonry noncombustible: exterior walls are constructed of masonry materials and floors/roof
are constructed of metal or other noncombustible products
- fire resistive:
Agent Exam Prep
10 homeowners policy conditions apply only to liability coverage - ANS-limit of liability
- payment for loss under Coverage E (personal liability) for damaged resulting from a single
occurrence is limited to personal liability limit specified in the declarations
severability of insurance
- liability coverage applies individually to each insured who must defend against claim or
lawsuits
duties after occurrence: after an occurrence, the named insured must:
- notify insurer or agent in waiting
- cooperate with insurer in handling claim
- promptly forward to the insurer any loss notice, demand, summons, or other legal documents
- help insurer settle claim, facilitate subrogation, attend trial/proceedings, gather evidence,
testify, and obtain witnesses
- give insurer sworn statement of loss and show property (damage to property of others
coverage)
- assume no obligation and make no payment directly to claimants
duties of an injured person (Coverage F)- medical payments to others
payment of claim (Coverage F)- medical payments to others
- when handling claim for medical payments, insurer deals directly with injured party (provides
insurer written proof of claim, needs access to medical reports/records, require injured party to
submit physical exam by chosen doctor, etc.)
suit against insurer
- no one can take legal action against insurer unless party has fully compiled with terms of
policy concerning liability (especially until a court has decided that the insured is legally
responsible for a loss or insurer has agreed to be responsible for the loss)
bankruptcy of an insured
- bankruptcy/insolvency of insured does not release insurer from its contractual obligations
under policy
other insurance
,- homeowners policy pays benefit after any other applicable insurance and before insurance
that specifically provides excess coverage to homeowners policy (umbrella policy)
ex)
Beth is sued by
2 types of covered perils - ANS-named perils
open perils
2 types of insurable property - ANS-real property: land, buildings, and other items (trees,
shrubs, and patios) attached to it; the buildings and how it is constructed
ex) doors, windows, sinks, toilets, etc.
personal property: tangible item other than real property; insured buildings contents (appliances)
& items that can be transported in and out of building as well as unattached items on land
ex) jewelry worn by insured outside the home, cameras brought on vacations, and outdoor patio
furniture
2 types of liability - ANS-strict (absolute) liability
vicarious liability
3 categories of liability coverages - ANS-- business liability coverage to pay damages for which
the insured is legally liable
- supplementary payments to pay expenses associated with claims and lawsuits against insured
- medical expenses arising from accident on insured's premises or involving the insured's
operations
3 common endorsements under homeowners policy - ANS-home business insurance coverage
(HO 07 01)
- unendorsed homeowners policy excludes coverage for most business-related risks --> home
business insurance coverage endorsement extends coverage to certain risk from home
business (coverage for business property, business income, extra expense, personal liability,
a\and medical payments)
to be eligible for coverage under this endorsement, a home business:
- must be owned by the named insured or a partnership, joint venture, or other organization that
is composed only of the named insured and resident family members
- must be operated from the residence premises that are primarily used and designed for private
residential purposes
- cam employ up to 3 persons but cannot exceed $250,000 in gross annual revenue
- cannot involve the manufacture, sale, or distribution of food or personal care products
- coverage for business property, business income, extra expense, personal liability, and
medical payments
,permitted incidental occupancies (HO 04 42)
- narrower than home business insurance coverage endorsement & covers incidental types of
business conducted on residence premises (offices, schools, and studios)
home day care coverage (HO 04 97)
- provides property and liability coverage for home day care center that an insured operates on
residence premises
the insured get this personal liability and medical payments coverage subject to 2 exclusions
for:
- bodily injury or property damage involving horses, motor vehicles, aircraft, hovercraft, or
watercraft
-bodily injury to an employee arising out of the home day care business
personal injury endorsement (HO 24 82)
- only covers "bodily injury" and "property damage", so any type of non-bodily injury such as
personal injury is excluded unless the policy has this endorsement
additional residence rented to others endorseme
3 most common defenses to negligence suit based on plaintiff's conduct - ANS-1) assumption of
risk:
if a plaintiff knowns there is a possibility that they could be injured by their action, and yet
voluntarily expose themselves to that danger anyway, the defendant will not be held liable for
injuries resulting from that exposure (voluntary nature of the plaintiff's conduct)
ex) sports stadium liability claims often involve the assumption of risk defense. Courts have held
that fans who decide to attend a live sporting event are aware of the risk that they may be struck
by baseballs, hockey pucks, automobile parts, and other flying objects and choose to be present
anyway --->
a fan who attends a live sporting event voluntarily assumes a known risk of a foreseeable injury
and the stadium owner or team owner will not be liable if a stray ball, puck, auto part, or other
flying object from the field of play strikes the fan
2) contributory negligence:
"was the plaintiff responsible to any degree for the injury?" --> yes --> plaintiff forfeits their claim
and the defendant is free from liability
3) comparative negligence: negligence of the plaintiff is compared against the negligence of the
defendant
juries assign % corresponding to the degree of fault each party bears for producing the injury -->
the amount the plaintiff's recovery is reduced by the portion of their fault & the defendant is held
liable for their portion of the fault
, ex) the plaintiff was driving 5mi over speed limit through a green light. The defendant (driving
another car) ran the red light, colliding in the intersection. The plaintiff was injured, resulting in
$100,000 in damages.
Under traditional rule of contributory negligence, the fact that the plaintiff was speeding would
have meant that he could not recover anything from the defendant
under the comparative negligence doctrine, however, a jury might assign 30%of fault
4 basic types of building construction - ANS-frame: one with interior and exterior walls of
combustible material
(because it's all combustible material, it has the greatest risk of fire --> charged higher fire
insurance premium than masonry veneer or solid masonry building)
- wood
- stucco or plaster on wood
- aluminum or plastic siding
masonry veneer: combustible frame and interior walls but an outside veneer (layer) of brick or
stone
masonry:
(susceptible to earth movement damage --> higher premium for earthquake coverage)
- adobe
- brick
- concrete
- gypsum block
- hollow concrete block
- stone
- tile
superior (noncombustible or fire-resistive): most durable
- noncombustible:
exterior walls, floors, and roof are constructed of and supported by metal, cement, or other
noncombustible materials
- masonry noncombustible: exterior walls are constructed of masonry materials and floors/roof
are constructed of metal or other noncombustible products
- fire resistive:
