AD Banker Property and Casualty chapter 3 Study Guide

Bodily insurance is best described - ANSWERSBodily injury is any physical injury, including sickness, disease, and death caused by the acts or omissions of an insured. Bodily injury liability expenses can include medical bills, lost wages, mental anguish, and pain and suffering. An occurrence limit is - ANSWERSthe most that will be paid for any one occurrence The aggregate limit - ANSWERSthe most that will be paid within the policy period Pro rata liability refers to - ANSWERSthe policy's Other Insurance clause and indicates that when two policies both cover a loss, they coordinate coverage by paying proportionate amounts compared to the total amount of insurance available for the loss. Losses that cannot be calculated objectively, such as pain and suffering or mental anguish, are considered - ANSWERSgeneral damages What is a negligent act - ANSWERSa type of tort, it must be an unintentional, civil act Bodily injury encompasses - ANSWERSPhysical pain, illness, or any impairment of physical condition. Personal injury encompasses - ANSWERSInjury, other than bodily injury, arising from intentional torts such as libel, slander, or invasion of privacy. An intervening cause is - ANSWERSa second negligent act that interferes with a chain of events leading to a loss What kind of torts do liability claims cover - ANSWERSonly unintentional torts (torts can be intentional and unintentional) How much will D's insurance company pay if D's policy has 25/50 limits for bodily injury? - ANSWERS25,000 per person but no more than 50,000 per occurrence Liability insurance is a two-party contract with payments made to which of the following? - ANSWERSUnder the terms of the policy, the insurer will pay those sums owed by the insured to a third party, whom the insured may have negligently damaged by a tort What are punitive damages - ANSWERSPunitive damages are awarded to punish a negligent party for extremely objectionable conduct What does no-fault policies do - ANSWERSunder no-fault insurance, the injured party collects insurance benefits from his/her own insurance as if it were first-party coverage, eliminating the need to determine negligence or legal liability Describe assumption of risk - ANSWERSwhen a person participates in an activity where a certain type of injury is known to be probable, that person's rights of recovery are barred or diminished under the doctrine of assumption of risk Which policy liability limits that may be applied to either bodily injury or property damage, in any combination - ANSWERScombined single limits Comparative negligence - ANSWERSprovides that the damages recoverable by each party to the suit be reduced in proportion to that party's degree of negligence. a proof loss provided by the insured is - ANSWERSa formal statement provided to the insurer that provides necessary details for the insurer to determine its liability under a policy. list three instances that a liability policy will cover - ANSWERSthey are designed to cover third party injuries or damages they do not cover medical expenses incurred by the insured they will pay sums that the insured becomes legally liable to pay (they will not cover the insured's own property) describe limit of liability - ANSWERSthe limits of liability, or limits of insurance, are shown on the policy's Declarations page and are the most paid by the policy regardless of the number of insureds, claims made, lawsuits filed, or parties making claims or filing lawsuits what is the best explanation of liability insurance? - ANSWERSIt provides protection in the event the insured's negligence causes bodily injury or property damage to others and the insured becomes legally obligated to pay damages Which of the following prevents recovery for injuries caused by a negligent party if the claimant was also negligent? - ANSWERSThe contributory negligence defense denies payment to an injured party if they were partly at fault. A certificate of insurance includes which of the following pieces of information? - ANSWERSThe effective date, names of the insurer and named insured, and the limits of liability Which of the following statements best describes the Other Insurance condition on a standard property insurance policy, when two separate property policies provide coverage for the same loss? - ANSWERSEach policy pays its pro rata share of the loss what is limited under DP-3 - ANSWERSnamed exclusions Under Dwelling policies, household and personal property, including property in transit between the insured's old and new residences, are covered under: - ANSWERScoverage C what form is coverage E additional living expenses not available to - ANSWERSDP-1 basic dwelling form what kind of peril basis does the DP-3 special form cover - ANSWERSan open perils basis what does the VMM endorsement provide - ANSWERSIf the insured desires vandalism coverage an endorsement and additional premium is required. Vandalism of vacant buildings is excluded even under the endorsement. A dwelling under construction is protected by a Broad Form Dwelling policy with the Dwelling Under Construction Endorsement. While under construction, the applicable Coverage A limit is: - ANSWERSUnder the Dwelling Under Construction Endorsement, the Coverage A limit of insurance is provisional. At any given time prior to completion, the limit that actually applies is a percentage of the stated Coverage A limit, equal to the proportion the actual value bears to the value on the date of completion. The insurer must be notified of completion so coverage may be adjusted. Which Dwelling form does not cover losses resulting from frozen plumbing? - ANSWERSDP-1 Under a Dwelling Policy, an insured tenant may use up to what percentage of the Coverage C limit of insurance for a covered loss to improvements, alterations, and additions made at the insured's expense to that part of the described location occupied by the named insured? - ANSWERS10%