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9780789732644

Property and Casualty Insurance License Exam Cram

by
  • ISBN13:

    9780789732644

  • ISBN10:

    0789732645

  • Edition: 1st
  • Format: Paperback
  • Copyright: 2004-11-12
  • Publisher: Pearson IT Certification
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Summary

If you are preparing for a career in property and casualty insurance, you need to pick up a copy ofProperty and Casualty Insurance License Exam Cram. You will quickly learn the concepts, laws, rate calculations and state and federal regulations that will be covered on the exam. You'll also receive a CD that includes a fully-customizable test engine, detailed score report and state-specific law supplement. No matter where you are taking your exam or which area you need to focus on in your studies,Property and Casualty Insurance License Exam Cramis your smartest way to get certified.

Author Biography

Eric Alan Anderson is Director of Insurance Education for BISYS Education Services, based in Indianapolis, Indiana. He has almost 25 years of experience creating training and test preparation materials for the financial services industry. In addition to authoring 17 insurance training texts and editing 8 others, he has written newsletters and magazine articles, and he has developed materials for audio cassette/workbook, videotape, computer disk and the Web. He has also taught basic English skills courses at the college level and has made presentations to national conferences of insurance associations.

Jennifer Martin, CPCU, is Senior Editor of Property-Casualty Products for BISYS Education Services, based in Indianapolis, Indiana. She is the author of 17 insurance training texts and maintains 50 titles on BISYS Education Services' course list. Jennifer has also developed interactive web-based courses and written state insurance law digests, computer documentation, newsletters, online help, and corporate disaster recovery plans.

Richard A. Morin, CIC, is a contract author based in Los Angeles, California. He has 35 years of experience writing and training on a broad range of subjects for the financial services industry. For several years, he was an editor for a major insurance training publisher, and he has also worked as an insurance underwriter, a rating supervisor and a licensed insurance and mutual fund sales representative.

Table of Contents

Introduction xxiii
Self-Assessment xxxi
Chapter 1 Principles of Insurance 1(10)
Risk
2(1)
Managing Risk
2(1)
Insurance
3(1)
Law of Large Numbers
3(1)
Elements of Insurability
4(1)
Pure and Speculative Risks
4(1)
Insurable Interest
4(1)
Other Elements of Insurability
5(1)
Other Insurance Terms
5(2)
Peril
6(1)
Hazard
6(1)
Physical, Morale, and Moral Hazards
6(1)
Exam Prep Questions
7(2)
Exam Prep Answers
9(2)
Chapter 2 The Insurance Contract 11(8)
Elements of a Valid Contract
12(1)
Characteristics of an Insurance Contract
13(2)
Principle of Indemnity
13(1)
Personal
13(1)
Aleatory
13(1)
Adhesion
14(1)
Unilateral
14(1)
Contract of Utmost Good Faith
14(1)
Conditional
15(1)
Parts of the Insurance Contract
15(1)
Exam Prep Questions
16(2)
Exam Prep Answers
18(1)
Chapter 3 Insurance Company Organization and Regulation 19(24)
Types of Insurance Organizations
20(3)
Stock and Mutual Companies
20(1)
Reciprocal Insurers
21(1)
Lloyd's Associations
21(1)
Fraternal Benefit Societies
21(1)
Risk Retention Groups and Purchasing Groups
22(1)
Self-Insurance
22(1)
Private Versus Government Insurers
23(1)
Lines of Insurance
23(1)
Four Major Lines of Insurance
23(1)
Personal and Commercial Lines
24(1)
Insurance Company Organization
24(8)
Agents and Their Duties
24(1)
Continuing Education Needs for Agents
25(1)
Authority of Agents
26(1)
Insurance Marketing Systems
27(1)
Other Insurance Professionals
28(1)
Other Insurance Functions
29(3)
Regulation of Insurance
32(6)
State Insurance Regulation
33(1)
Regulation of Companies
33(1)
Regulation of Agents
34(2)
Form and Rate Filings
36(1)
Enforcement
37(1)
Federal Regulation
37(1)
Exam Prep Questions
38(3)
Exam Prep Answers
41(2)
Chapter 4 Insurance Transactions 43(12)
Applications
44(1)
Binders
44(1)
Underwriting a Policy
45(2)
Fair Credit Reporting Act
46(1)
Adverse Selection
47(1)
Rating a Policy
47(1)
Judgment Rating
47(1)
Manual Rating
48(1)
Merit Rating
48(1)
Certificates of Insurance
48(1)
Misrepresentation, Concealment, and Fraud
49(1)
Representations and Warranties
50(1)
Waiver and Estoppel
50(1)
Cancellation and Nonrenewal
50(2)
Exam Prep Questions
52(2)
Exam Prep Answers
54(1)
Chapter 5 Introduction to Property Insurance 55(22)
Declarations
56(3)
Who Is Insured
56(1)
What Property Is Covered and Where
57(1)
When Property Is Insured
58(1)
How Much Property Is Insured For
58(1)
Endorsements That Apply
59(1)
Insuring Agreements
59(1)
Property Covered
59(1)
Perils Insured Against
59(1)
Direct and Indirect Loss
60(1)
Exclusions and Limitations
60(2)
Concurrent Causation
61(1)
Conditions
62(8)
Duties Following Loss
62(1)
Valuation
63(1)
Coinsurance
64(1)
When Losses Are Paid
65(1)
Pair or Set Clauses
65(1)
Deductible
66(1)
Salvage and Abandonment
66(1)
Subrogation
67(1)
Appraisal and Arbitration
67(1)
Other Insurance
67(1)
Liberalization
68(1)
Assignment
69(1)
No Benefit to Bailee
69(1)
Mortgage Condition
69(1)
Policy Period and Policy Territory
70(1)
Vacancy and Unoccupancy
70(1)
Reporting Forms
70(1)
Exam Prep Questions
71(3)
Exam Prep Answers
74(3)
Chapter 6 Introduction to Liability Insurance 77(16)
Negligence
78(2)
Establishing Negligence
78(2)
Defenses Against Negligence
80(2)
Contributory Negligence
80(1)
Comparative Negligence
81(1)
Other Defenses Against Negligence
81(1)
Absolute Liability
82(1)
Vicarious Liability
82(1)
Liability Insurance
83(6)
Third Party Losses
83(1)
Types of Damages
83(1)
Insuring Agreement
84(2)
Policy Limits
86(1)
Exclusions
87(1)
Conditions
87(2)
Exam Prep Questions
89(2)
Exam Prep Answers
91(2)
Chapter 7 Dwelling Insurance 93(30)
Eligibility and Insureds
94(1)
Basic Form (DP-1)
95(7)
Major Policy Coverages
95(2)
Perils Insured Against
97(1)
Extended Coverage Perils
97(2)
Other Coverages
99(1)
Exclusions
100(1)
Conditions
101(1)
Broad Form (DP-2) and Special Form (DP-3)
102(5)
Covered Perils-Broad Form
102(2)
Covered Perils-Special Form
104(1)
Major Policy Coverages
105(1)
Other Coverages
106(1)
Replacement Cost Coverage
107(1)
Dwelling Forms Comparison
107(2)
Dwelling Policy Endorsements
109(5)
Broad Theft Coverage
110(1)
Limited Theft Coverage
111(1)
Personal Liability and Medical Payments to Others
111(3)
Other Endorsements
114(1)
Dwelling 2002 Forms
114(5)
Coverage B
115(1)
Coverage C
115(1)
Other Coverages
115(1)
Perils Insured Against
116(1)
General Exclusions
117(1)
Conditions
117(2)
Exam Prep Questions
119(3)
Exam Prep Answers
122(1)
Chapter 8 Homeowners Insurance 123(34)
Eligibility and Insureds
124(1)
Extent and Scope of Homeowners Coverage
125(1)
Section I-Property
126(13)
Coverage A-Dwelling and Coverage B-Other Structures
126(1)
Coverage C-Personal Property
127(2)
Coverage D-Loss of Use
129(1)
Additional Coverages
129(3)
Perils Insured Against
132(4)
Exclusions
136(1)
Conditions
137(1)
Limits of Liability-Deductible
138(1)
Section II-Liability
139(5)
Coverage E-Personal Liability
139(1)
Coverage F-Medical Payments to Others
140(1)
Exclusions
141(1)
Additional Coverages
142(1)
Conditions
143(1)
Homeowners Endorsements
144(3)
Section I Endorsements
144(2)
Section II Endorsements
146(1)
Limited Fungi, Wet or Dry Rot, or Bacteria Coverage
146(1)
Homeowners Forms Comparison
147(4)
Exam Prep Questions
151(3)
Exam Prep Answers
154(3)
Chapter 9 Personal Auto Insurance 157(28)
Organization and Eligibility
158(1)
Definitions
159(2)
For Liability, Medical Payments, and Uninsured Motorists Coverage
160(1)
For Physical Damage Coverage
160(1)
Part A-Liability Coverage
161(5)
Coverage
161(1)
Who Is an Insured
162(1)
Supplementary Payments
163(1)
Exclusions
163(1)
Limits of Liability
164(1)
Financial Responsibility
165(1)
Out of State Coverage
165(1)
Other Insurance
165(1)
Part B-Medical Payments Coverage
166(2)
Coverage-Who Is an Insured
166(1)
Exclusions
167(1)
Limits of Liability and Other Insurance
167(1)
Part C-Uninsured Motorists Coverage
168(3)
Coverage
168(1)
Definition of Uninsured Motor Vehicle
168(1)
Who Is Insured
169(1)
Exclusions
170(1)
Limit of Liability
170(1)
Other Insurance
170(1)
Arbitration
171(1)
Part D-Coverage for Damage to Your Auto
171(4)
Coverage
171(2)
Transportation Expenses
173(1)
Exclusions
173(1)
Other Provisions
174(1)
Parts E and F-Conditions
175(1)
Underinsured Motorists Coverage
176(1)
Personal Auto Policy Endorsements
177(1)
No-Fault Insurance
178(1)
Assigned Risk Plans
179(1)
Exam Prep Questions
180(3)
Exam Prep Answers
183(2)
Chapter 10 Miscellaneous Personal Insurance 185(16)
Flood Insurance
186(3)
Eligibility
186(1)
Coverage
186(1)
Property Not Covered
187(1)
Other Provisions
188(1)
Write Your Own Program
188(1)
Application Procedures
188(1)
Earthquake Insurance
189(1)
Mobile Home Insurance
189(1)
Personal Inland Marine Insurance
190(3)
Personal Inland Marine Forms
191(2)
Personal Watercraft Insurance
193(2)
Boatowners and Outboard Motor and Boat Policies
193(1)
Personal Yacht Policies
194(1)
Personal Umbrella Insurance
195(1)
Excess Liability Coverage
195(1)
Coverage for Excluded Losses
196(1)
FAIR Plans
196(2)
Exam Prep Questions
198(2)
Exam Prep Answers
200(1)
Chapter 11 The Commercial Package Policy 201(8)
Eligible Coverages
202(1)
Common Policy Declarations
203(1)
Common Policy Conditions
204(2)
Cancellation
204(1)
Changes and Premiums
204(1)
Examination of Books and Records and Inspections and Surveys
205(1)
Transfer of Rights and Duties
205(1)
Exam Prep Questions
206(2)
Exam Prep Answers
208(1)
Chapter 12 The Businessowners Policy 209(34)
Eligibility and Policy Organization
210(3)
Eligible Occupancies
210(2)
Ineligible Risks
212(1)
Organization
212(1)
Property Coverage
213(14)
Building Coverage
213(1)
Business Personal Property Coverage
214(1)
Property Not Covered
214(1)
Covered Causes of Loss
215(3)
Additional Coverages
218(5)
Coverage Extensions
223(1)
Optional Coverages
224(2)
Limits of Insurance
226(1)
Deductible
227(1)
Liability and Medical Expenses Coverage
227(7)
Liability Coverage
227(2)
Supplementary Payments
229(1)
Medical Expenses Coverage
229(1)
Exclusions
230(2)
Who Is an Insured
232(1)
Limits of Insurance
233(1)
Conditions
234(1)
Endorsements
235(2)
Utility Services Endorsements
235(1)
Protective Safeguards Endorsement
235(1)
Hired Auto and Nonowned Auto Liability
236(1)
Comparison of Commercial Package Policy and Businessowners Policy
237(1)
Exam Prep Questions
238(3)
Exam Prep Answers
241(2)
Chapter 13 Commercial Property Insurance 243(34)
Commercial Property Coverage Part
244(2)
Commercial Property Declarations and Coverage Forms
244(1)
Causes of Loss Forms
245(1)
Commercial Property Conditions Form
245(1)
Building and Personal Property Coverage Form
246(9)
Property Covered
246(2)
Property Not Covered
248(1)
Additional Coverages
249(2)
Coverage Extensions
251(1)
Conditions
252(2)
Optional Coverages
254(1)
Builders Risk Coverage Form
255(2)
Property Covered
255(1)
Amount of Coverage Available
256(1)
Miscellaneous Conditions
256(1)
Builders Risk Reporting Form
257(1)
Condominium Coverage Forms
257(1)
Business Income Coverage Forms
258(3)
Coverages
258(1)
Additional Coverages
259(1)
Optional Coverages
260(1)
Business Income from Dependent Properties-Broad Form
261(1)
Extra Expense Coverage Form
261(1)
Legal Liability Coverage Form
262(1)
Causes of Loss Forms
262(7)
Basic
262(2)
Broad
264(2)
Special
266(2)
Causes of Loss-Earthquake and Volcanic Eruption
268(1)
Comparison of Causes of Loss
268(1)
Endorsements
269(2)
Value Reporting Endorsements
269(1)
Ordinance or Law Coverage Endorsement
270(1)
Spoilage Endorsement
270(1)
Exam Prep Questions
271(3)
Exam Prep Answers
274(3)
Chapter 14 Ocean and Inland Marine Insurance 277(28)
Ocean Marine Insurance
278(3)
Categories of Ocean Marine Insurance
278(1)
Characteristics of Ocean Marine Insurance
279(2)
Inland Marine Insurance
281(1)
Nationwide Definition
281(1)
Filed and Nonfiled Forms
282(1)
Filed Forms
282(15)
Commercial Inland Marine Coverage Part
283(1)
Commercial Inland Marine Conditions
283(1)
Mail Coverage Form
284(1)
Physicians and Surgeons Equipment Coverage Form
285(1)
Theatrical Property Coverage Form
286(1)
Film Coverage Form
287(1)
Commercial Articles Coverage Form
288(1)
Accounts Receivable Coverage Form
289(1)
Valuable Papers and Records Coverage Form
290(1)
Signs Coverage Form
291(1)
Jewelers Block Coverage Form
291(2)
Floor Plan Coverage Form
293(1)
Equipment Dealers Coverage Form
294(2)
Camera and Musical Instrument Dealers Coverage Form
296(1)
Nonfiled Forms
297(3)
Domestic Shipments
297(1)
Instrumentalities of Transportation and Communication
298(1)
Commercial Property Floater Risks
298(2)
Exam Prep Questions
300(3)
Exam Prep Answers
303(2)
Chapter 15 Commercial General Liability Insurance 305(26)
Business Liability Exposures
306(1)
Premises and Operations Exposure
306(1)
Products-Completed Operations Exposure
306(1)
Indirect or Contingent Liability Exposure
306(1)
Exposures Covered by Commercial General Liability Insurance
307(1)
Commercial General Liability Coverage Part
307(4)
Occurrence Form
308(1)
Claims-Made Form
309(2)
Definitions
311(3)
CGL Coverages Provided
314(1)
Coverage A-Bodily Injury and Property Damage Liability
315(2)
Exclusions-Coverage A
315(2)
Coverage B-Personal and Advertising Injury Liability
317(1)
Exclusions-Coverage B
317(1)
Coverage A and B Supplementary Payments
318(1)
Coverage C-Medical Payments
319(1)
Exclusions-Coverage C
319(1)
Who Is an Insured?
319(2)
Named Insured
319(1)
Others Who May Be Insured
320(1)
Newly Acquired Organizations
321(1)
Limits of Insurance
321(1)
Conditions
322(3)
Duties in the Event of Occurrence, Offense, Claim, or Suit
323(1)
Nonrenewal
323(1)
Other Insurance
324(1)
Claim Information
324(1)
Other Commercial General Liability Coverage Forms and Endorsements
325(1)
Exam Prep Questions
326(3)
Exam Prep Answers
329(2)
Chapter 16 Commercial Auto Insurance 331(22)
Commercial Auto Coverage Part
332(1)
Business Auto Coverage Form
332(1)
Definitions
333(7)
Covered Autos
334(1)
Liability Coverage
335(3)
Physical Damage Coverage
338(2)
Conditions
340(1)
Garage Coverage Form
340(3)
Covered Autos
341(1)
Liability Coverage
341(1)
Garagekeepers Coverage
342(1)
Physical Damage Coverage
342(1)
Truckers Coverage Form
343(1)
Covered Autos
343(1)
Trailer Interchange Coverage
343(1)
Motor Carrier Coverage Form
344(1)
Motor Carrier Act of 1980
344(1)
Endorsements
345(3)
Drive Other Car Coverage Endorsement
345(1)
Individual Named Insured
346(1)
Employees as Additional Insureds
346(1)
Other Endorsements
346(2)
Exam Prep Questions
348(3)
Exam Prep Answers
351(2)
Chapter 17 Commercial Crime Insurance 353(16)
Types of Crime Forms
354(2)
Loss Sustained Form
354(1)
Discovery Form
355(1)
Definitions
356(1)
Types of Crimes
356(1)
Other Definitions
357(1)
Insuring Agreements and Endorsements
357(4)
Employee Theft
358(1)
Forgery or Alteration
358(1)
Inside the Premises-Theft of Money and Securities
359(1)
Inside the Premises-Robbery or Safe Burglary of Other Property
359(1)
Outside the Premises
359(1)
Computer Fraud
360(1)
Money Orders and Counterfeit Paper Currency
360(1)
Funds Transfer Fraud
360(1)
Extortion-Commercial Entities Endorsement
360(1)
Exclusions
361(1)
For All Coverages
361(1)
For Selected Coverages
361(1)
Conditions
362(2)
Cancellation as to Any Employee
362(1)
Valuation
363(1)
Other Conditions That Apply to All Coverages
363(1)
Conditions That Apply to Selected Coverages
364(1)
Fidelity Bonds
364(2)
Parties to a Bond
365(1)
Types of Fidelity Bonds
365(1)
Exam Prep Questions
366(2)
Exam Prep Answers
368(1)
Chapter 18 Workers Compensation 369(14)
Workers Compensation Laws
370(3)
Occupations Covered
371(1)
Benefits Provided
371(1)
Compensable Injuries
372(1)
Types of Disability
372(1)
Compulsory Versus Elective
373(1)
Funding
373(1)
Workers Compensation and Employers Liability Policy
374(3)
Coverages
374(2)
Exclusions
376(1)
Endorsements
377(1)
Federal Workers Compensation Laws
377(1)
Rating Workers Compensation Coverage
378(1)
Exam Prep Questions
379(2)
Exam Prep Questions
381(2)
Chapter 19 Miscellaneous Commercial Insurance 383(30)
Farm Insurance
384(2)
Farm Property Coverage Forms
384(2)
Farm Liability Coverage Form
386(1)
Boiler and Machinery Insurance
386(11)
Boiler and Machinery Coverage Part
387(1)
Equipment Breakdown Protection Coverage Form
387(10)
Aviation Insurance
397(1)
Physical Damage Coverage
397(1)
Liability Coverage
397(1)
Professional Liability Insurance
398(1)
Employment Practices Liability Insurance
399(1)
Difference in Conditions Insurance
399(1)
Commercial Umbrella Insurance
400(1)
Surety Bonds
400(2)
Contract Bonds
401(1)
Judicial Bonds
402(1)
Other Types of Bonds
402(1)
Surplus Lines
402(1)
The Unauthorized Market and Surplus Lines
403(1)
Conditions for Obtaining Coverage
403(1)
Federal Terrorism Risk Insurance Act of 2002
403(4)
Background
403(1)
Temporary Program
404(1)
Definitions
405(1)
General Overview of Program
405(1)
Insurer Deductibles
406(1)
Cap on Annual Liability
406(1)
Exam Prep Questions
407(3)
Exam Prep Answers
410(3)
Chapter 20 Practice Exam 1 413(10)
Practice Exam 1 Questions
414(9)
Chapter 21 Answers to Practice Exam 1 423(8)
Quick Check Answer Key 1
423(1)
Answers and Explanations
424(7)
Chapter 22 Practice Exam 2 431(10)
Practice Exam 2 Questions
431(10)
Chapter 23 Answers to Practice Exam 2 441(8)
Quick Check Answer Key 2
441(1)
Answers and Explanations
442(7)
Appendix A What's on the CD-ROM 449(4)
Appendix B Need to Know More CD
Glossary 453(38)
Index 491

Supplemental Materials

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Excerpts

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