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Property and Casualty Insurance License Exam Cram™

Book Description

If you are preparing for a career in property and casualty insurance, you need to pick up a copy of Property 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 Cram is your smartest way to get certified.

Table of Contents

  1. Copyright
  2. The Property and Casualty Insurance Cram Sheet
    1. BASIC TERMS AND CONCEPTS
      1. Contract Law Requirements
      2. Insurance Transactions
      3. Underwriting and Administering Insurance Contracts
      4. Property Insurance Concepts
      5. Liability Insurance Concepts
      6. Dwelling and Homeowner Coverages
      7. Automobile Insurance
      8. Commercial Package policy
      9. Businessowners Policy
      10. Commercial Property Insurance
      11. Commercial General Liability Insurance
      12. Commercial Crime Insurance
      13. Workers Compensation
      14. Miscellaneous Commercial Coverages
  3. About the Authors
    1. About BISYS
    2. About the Reviewer
    3. We Want to Hear from You!
  4. Introduction
    1. Getting an Insurance License
    2. Taking a Licensing Exam
    3. How to Prepare for an Exam
      1. What This Book Will Not Do
      2. What This Book Is Designed to Do
    4. About This Book
      1. Chapter Formats
      2. Contacting the Source
  5. Self-Assessment
    1. Getting Prepared
      1. Put Yourself to the (Practice) Test
    2. Other Preparation
    3. No Experience Required
      1. Onward to Exam and Career Success!
  6. 1. Principles of Insurance
    1. Risk
      1. Managing Risk
    2. Insurance
    3. Law of Large Numbers
    4. Elements of Insurability
      1. Pure and Speculative Risks
      2. Insurable Interest
      3. Other Elements of Insurability
    5. Other Insurance Terms
      1. Peril
      2. Hazard
      3. Physical, Morale, and Moral Hazards
    6. Exam Prep Questions
    7. Exam Prep Answers
  7. 2. The Insurance Contract
    1. Elements of a Valid Contract
    2. Characteristics of an Insurance Contract
      1. Principle of Indemnity
      2. Personal
      3. Aleatory
      4. Adhesion
      5. Unilateral
      6. Contract of Utmost Good Faith
      7. Conditional
    3. Parts of the Insurance Contract
    4. Exam Prep Questions
    5. Exam Prep Answers
  8. 3. Insurance Company Organization and Regulation
    1. Types of Insurance Organizations
      1. Stock and Mutual Companies
      2. Reciprocal Insurers
      3. Lloyd's Associations
      4. Fraternal Benefit Societies
      5. Risk Retention Groups and Purchasing Groups
      6. Self-Insurance
      7. Private Versus Government Insurers
    2. Lines of Insurance
      1. Four Major Lines of Insurance
      2. Personal and Commercial Lines
    3. Insurance Company Organization
      1. Agents and Their Duties
      2. Continuing Education Needs for Agents
      3. Authority of Agents
      4. Insurance Marketing Systems
      5. Other Insurance Professionals
      6. Other Insurance Functions
        1. Underwriting Department
        2. Policy Issue and Administration
        3. Claims Department
        4. Actuarial and Statistical Department
        5. Accounting Department
        6. Investment Department
        7. Legal Department
        8. Audit Department
        9. Loss Control Department
        10. Agency Department
        11. Marketing Department
        12. Reinsurance Department
        13. Miscellaneous Support Departments
    4. Regulation of Insurance
      1. State Insurance Regulation
      2. Regulation of Companies
        1. Admitted and Nonadmitted Companies
        2. Domestic, Foreign, and Alien Companies
        3. Financial Regulation
        4. Company Ratings
      3. Regulation of Agents
        1. Licensing
        2. Codes Regulating Agents
      4. Form and Rate Filings
        1. Rating Organizations
      5. Enforcement
      6. Federal Regulation
    5. Exam Prep Questions
    6. Exam Prep Answers
  9. 4. Insurance Transactions
    1. Applications
    2. Binders
    3. Underwriting a Policy
      1. Fair Credit Reporting Act
      2. Adverse Selection
    4. Rating a Policy
      1. Judgment Rating
      2. Manual Rating
      3. Merit Rating
    5. Certificates of Insurance
    6. Misrepresentation, Concealment, and Fraud
    7. Representations and Warranties
    8. Waiver and Estoppel
    9. Cancellation and Nonrenewal
    10. Exam Prep Questions
    11. Exam Prep Answers
  10. 5. Introduction to Property Insurance
    1. Declarations
      1. Who Is Insured
      2. What Property Is Covered and Where
      3. When Property Is Insured
      4. How Much Property Is Insured For
      5. Endorsements That Apply
    2. Insuring Agreements
      1. Property Covered
      2. Perils Insured Against
      3. Direct and Indirect Loss
    3. Exclusions and Limitations
      1. Concurrent Causation
    4. Conditions
      1. Duties Following Loss
      2. Valuation
        1. Actual Cash Value
        2. Repair Cost
        3. Replacement Cost and Functional Replacement Cost
        4. Market Value
      3. Coinsurance
      4. When Losses Are Paid
      5. Pair or Set Clauses
      6. Deductible
      7. Salvage and Abandonment
      8. Subrogation
      9. Appraisal and Arbitration
      10. Other Insurance
        1. Primary and Excess
        2. Pro Rata Liability
      11. Liberalization
      12. Assignment
      13. No Benefit to Bailee
      14. Mortgage Condition
      15. Policy Period and Policy Territory
      16. Vacancy and Unoccupancy
    5. Reporting Forms
    6. Exam Prep Questions
    7. Exam Prep Answers
  11. 6. Introduction to Liability Insurance
    1. Negligence
      1. Establishing Negligence
        1. Legal Duty Owed and Breach of That Duty
        2. Proximate Cause
        3. Damages
    2. Defenses Against Negligence
      1. Contributory Negligence
      2. Comparative Negligence
      3. Other Defenses Against Negligence
    3. Absolute Liability
    4. Vicarious Liability
    5. Liability Insurance
      1. Third Party Losses
      2. Types of Damages
      3. Insuring Agreement
        1. Coverages
        2. Defense Costs
        3. Prejudgment Interest
        4. Supplementary Payments
      4. Policy Limits
      5. Exclusions
      6. Conditions
        1. Duties After Loss
        2. Other Insurance
    6. Exam Prep Questions
    7. Exam Prep Answers
  12. 7. Dwelling Insurance
    1. Eligibility and Insureds
    2. Basic Form (DP-1)
      1. Major Policy Coverages
      2. Perils Insured Against
      3. Extended Coverage Perils
      4. Other Coverages
      5. Exclusions
      6. Conditions
    3. Broad Form (DP-2) and Special Form (DP-3)
      1. Covered Perils—Broad Form
      2. Covered Perils—Special Form
      3. Major Policy Coverages
      4. Other Coverages
      5. Replacement Cost Coverage
    4. Dwelling Forms Comparison
    5. Dwelling Policy Endorsements
      1. Broad Theft Coverage
      2. Limited Theft Coverage
      3. Personal Liability and Medical Payments to Others
        1. Coverages
        2. Additional Coverages
        3. Exclusions
      4. Other Endorsements
    6. Dwelling 2002 Forms
      1. Coverage B
      2. Coverage C
      3. Other Coverages
      4. Perils Insured Against
      5. General Exclusions
      6. Conditions
    7. Exam Prep Questions
    8. Exam Prep Answers
  13. 8. Homeowners Insurance
    1. Eligibility and Insureds
    2. Extent and Scope of Homeowners Coverage
    3. Section I—Property
      1. Coverage A—Dwelling and Coverage B—Other Structures
      2. Coverage C—Personal Property
        1. Special Limits of Liability
      3. Coverage D—Loss of Use
      4. Additional Coverages
        1. In All Homeowners Forms
        2. In Selected Homeowners Forms
      5. Perils Insured Against
        1. Basic Named Perils
        2. Broad Named Perils
        3. Special Form Coverage
        4. Comprehensive Coverage
      6. Exclusions
      7. Conditions
      8. Limits of Liability—Deductible
    4. Section II—Liability
      1. Coverage E—Personal Liability
      2. Coverage F—Medical Payments to Others
      3. Exclusions
      4. Additional Coverages
      5. Conditions
        1. Section II
        2. Sections I and II
    5. Homeowners Endorsements
      1. Section I Endorsements
      2. Section II Endorsements
      3. Limited Fungi, Wet or Dry Rot, or Bacteria Coverage
    6. Homeowners Forms Comparison
    7. Exam Prep Questions
    8. Exam Prep Answers
  14. 9. Personal Auto Insurance
    1. Organization and Eligibility
    2. Definitions
      1. For Liability, Medical Payments, and Uninsured Motorists Coverage
      2. For Physical Damage Coverage
    3. Part A—Liability Coverage
      1. Coverage
      2. Who Is an Insured
      3. Supplementary Payments
      4. Exclusions
      5. Limits of Liability
      6. Financial Responsibility
      7. Out of State Coverage
      8. Other Insurance
    4. Part B—Medical Payments Coverage
      1. Coverage—Who Is an Insured
      2. Exclusions
      3. Limits of Liability and Other Insurance
    5. Part C—Uninsured Motorists Coverage
      1. Coverage
      2. Definition of Uninsured Motor Vehicle
      3. Who Is Insured
      4. Exclusions
      5. Limit of Liability
      6. Other Insurance
      7. Arbitration
    6. Part D—Coverage for Damage to Your Auto
      1. Coverage
      2. Transportation Expenses
      3. Exclusions
      4. Other Provisions
    7. Parts E and F—Conditions
    8. Underinsured Motorists Coverage
    9. Personal Auto Policy Endorsements
    10. No-Fault Insurance
    11. Assigned Risk Plans
    12. Exam Prep Questions
    13. Exam Prep Answers
  15. 10. Miscellaneous Personal Insurance
    1. Flood Insurance
      1. Eligibility
      2. Coverage
      3. Property Not Covered
      4. Other Provisions
      5. Write Your Own Program
      6. Application Procedures
    2. Earthquake Insurance
    3. Mobile Home Insurance
    4. Personal Inland Marine Insurance
      1. Personal Inland Marine Forms
        1. Personal Articles Form
        2. Personal Property Form
        3. Personal Effects Form
    5. Personal Watercraft Insurance
      1. Boatowners and Outboard Motor and Boat Policies
      2. Personal Yacht Policies
    6. Personal Umbrella Insurance
      1. Excess Liability Coverage
      2. Coverage for Excluded Losses
    7. FAIR Plans
    8. Exam Prep Questions
    9. Exam Prep Answers
  16. 11. The Commercial Package Policy
    1. Eligible Coverages
    2. Common Policy Declarations
    3. Common Policy Conditions
      1. Cancellation
      2. Changes and Premiums
      3. Examination of Books and Records and Inspections and Surveys
      4. Transfer of Rights and Duties
    4. Exam Prep Questions
    5. Exam Prep Answers
  17. 12. The Businessowners Policy
    1. Eligibility and Policy Organization
      1. Eligible Occupancies
      2. Ineligible Risks
      3. Organization
    2. Property Coverage
      1. Building Coverage
      2. Business Personal Property Coverage
      3. Property Not Covered
      4. Covered Causes of Loss
        1. Limitations
        2. Exclusions
      5. Additional Coverages
        1. Debris Removal
        2. Collapse
        3. Business Income
        4. Extra Expense
        5. Increased Cost of Construction
        6. Civil Authority
        7. Forgery and Alteration
        8. Business Income from Dependent Properties
        9. Other Additional Coverages
      6. Coverage Extensions
      7. Optional Coverages
        1. Employee Dishonesty
        2. Mechanical Breakdown
        3. Other Optional Coverages
      8. Limits of Insurance
      9. Deductible
    3. Liability and Medical Expenses Coverage
      1. Liability Coverage
      2. Supplementary Payments
      3. Medical Expenses Coverage
      4. Exclusions
      5. Who Is an Insured
      6. Limits of Insurance
    4. Conditions
    5. Endorsements
      1. Utility Services Endorsements
      2. Protective Safeguards Endorsement
      3. Hired Auto and Nonowned Auto Liability
    6. Comparison of Commercial Package Policy and Businessowners Policy
    7. Exam Prep Questions
    8. Exam Prep Answers
  18. 13. Commercial Property Insurance
    1. Commercial Property Coverage Part
      1. Commercial Property Declarations and Coverage Forms
      2. Causes of Loss Forms
      3. Commercial Property Conditions Form
    2. Building and Personal Property Coverage Form
      1. Property Covered
      2. Property Not Covered
      3. Additional Coverages
      4. Coverage Extensions
      5. Conditions
      6. Optional Coverages
    3. Builders Risk Coverage Form
      1. Property Covered
      2. Amount of Coverage Available
      3. Miscellaneous Conditions
      4. Builders Risk Reporting Form
    4. Condominium Coverage Forms
    5. Business Income Coverage Forms
      1. Coverages
      2. Additional Coverages
      3. Optional Coverages
      4. Business Income from Dependent Properties—Broad Form
    6. Extra Expense Coverage Form
    7. Legal Liability Coverage Form
    8. Causes of Loss Forms
      1. Basic
        1. Additional Coverage—Limited Coverage for Fungus, Wet Rot, Dry Rot, and Bacteria
      2. Broad
        1. Collapse Additional Coverage
      3. Special
        1. Limitations
      4. Causes of Loss—Earthquake and Volcanic Eruption
      5. Comparison of Causes of Loss
    9. Endorsements
      1. Value Reporting Endorsements
      2. Ordinance or Law Coverage Endorsement
      3. Spoilage Endorsement
    10. Exam Prep Questions
    11. Exam Prep Answers
  19. 14. Ocean and Inland Marine Insurance
    1. Ocean Marine Insurance
      1. Categories of Ocean Marine Insurance
      2. Characteristics of Ocean Marine Insurance
    2. Inland Marine Insurance
      1. Nationwide Definition
      2. Filed and Nonfiled Forms
    3. Filed Forms
      1. Commercial Inland Marine Coverage Part
      2. Commercial Inland Marine Conditions
      3. Mail Coverage Form
      4. Physicians and Surgeons Equipment Coverage Form
      5. Theatrical Property Coverage Form
      6. Film Coverage Form
      7. Commercial Articles Coverage Form
      8. Accounts Receivable Coverage Form
      9. Valuable Papers and Records Coverage Form
      10. Signs Coverage Form
      11. Jewelers Block Coverage Form
      12. Floor Plan Coverage Form
      13. Equipment Dealers Coverage Form
      14. Camera and Musical Instrument Dealers Coverage Form
    4. Nonfiled Forms
      1. Domestic Shipments
      2. Instrumentalities of Transportation and Communication
      3. Commercial Property Floater Risks
        1. Bailee's Customer Policies
        2. Equipment Floaters
        3. Business Floaters
        4. Dealers Policies
    5. Exam Prep Questions
    6. Exam Prep Answers
  20. 15. Commercial General Liability Insurance
    1. Business Liability Exposures
      1. Premises and Operations Exposure
      2. Products-Completed Operations Exposure
      3. Indirect or Contingent Liability Exposure
      4. Exposures Covered by Commercial General Liability Insurance
    2. Commercial General Liability Coverage Part
      1. Occurrence Form
      2. Claims-Made Form
        1. Retroactive Date
        2. Extended Reporting Periods
    3. Definitions
    4. CGL Coverages Provided
    5. Coverage A—Bodily Injury and Property Damage Liability
      1. Exclusions—Coverage A
    6. Coverage B—Personal and Advertising Injury Liability
      1. Exclusions—Coverage B
    7. Coverage A and B Supplementary Payments
    8. Coverage C—Medical Payments
      1. Exclusions—Coverage C
    9. Who Is an Insured?
      1. Named Insured
      2. Others Who May Be Insured
      3. Newly Acquired Organizations
    10. Limits of Insurance
    11. Conditions
      1. Duties in the Event of Occurrence, Offense, Claim, or Suit
      2. Nonrenewal
      3. Other Insurance
      4. Claim Information
    12. Other Commercial General Liability Coverage Forms and Endorsements
    13. Exam Prep Questions
    14. Exam Prep Answers
  21. 16. Commercial Auto Insurance
    1. Commercial Auto Coverage Part
    2. Business Auto Coverage Form
      1. Definitions
      2. Covered Autos
      3. Liability Coverage
        1. Who Is an Insured
        2. Exclusions
        3. Supplementary Payments
        4. Out of State Coverage Extensions
        5. Worldwide Liability Coverage
      4. Physical Damage Coverage
        1. Exclusions
      5. Conditions
    3. Garage Coverage Form
      1. Covered Autos
      2. Liability Coverage
      3. Garagekeepers Coverage
      4. Physical Damage Coverage
    4. Truckers Coverage Form
      1. Covered Autos
      2. Trailer Interchange Coverage
    5. Motor Carrier Coverage Form
      1. Motor Carrier Act of 1980
    6. Endorsements
      1. Drive Other Car Coverage Endorsement
      2. Individual Named Insured
      3. Employees as Additional Insureds
      4. Other Endorsements
    7. Exam Prep Questions
    8. Exam Prep Answers
  22. 17. Commercial Crime Insurance
    1. Types of Crime Forms
      1. Loss Sustained Form
      2. Discovery Form
    2. Definitions
      1. Types of Crimes
      2. Other Definitions
    3. Insuring Agreements and Endorsements
      1. Employee Theft
      2. Forgery or Alteration
      3. Inside the Premises—Theft of Money and Securities
      4. Inside the Premises—Robbery or Safe Burglary of Other Property
      5. Outside the Premises
      6. Computer Fraud
      7. Money Orders and Counterfeit Paper Currency
      8. Funds Transfer Fraud
      9. Extortion—Commercial Entities Endorsement
    4. Exclusions
      1. For All Coverages
      2. For Selected Coverages
    5. Conditions
      1. Cancellation as to Any Employee
      2. Valuation
      3. Other Conditions That Apply to All Coverages
      4. Conditions That Apply to Selected Coverages
    6. Fidelity Bonds
      1. Parties to a Bond
      2. Types of Fidelity Bonds
    7. Exam Prep Questions
    8. Exam Prep Answers
  23. 18. Workers Compensation
    1. Workers Compensation Laws
      1. Occupations Covered
      2. Benefits Provided
      3. Compensable Injuries
      4. Types of Disability
      5. Compulsory Versus Elective
    2. Funding
    3. Workers Compensation and Employers Liability Policy
      1. Coverages
      2. Exclusions
      3. Endorsements
    4. Federal Workers Compensation Laws
    5. Rating Workers Compensation Coverage
    6. Exam Prep Questions
    7. Exam Prep Questions
  24. 19. Miscellaneous Commercial Insurance
    1. Farm Insurance
      1. Farm Property Coverage Forms
        1. Covered Property
        2. Causes of Loss and Other Provisions
      2. Farm Liability Coverage Form
    2. Boiler and Machinery Insurance
      1. Boiler and Machinery Coverage Part
      2. Equipment Breakdown Protection Coverage Form
        1. Covered Causes of Loss
        2. Definitions
        3. Coverages Provided
        4. Exclusions
        5. Limits of Insurance
        6. Deductibles
        7. Loss Conditions
        8. General Conditions
    3. Aviation Insurance
      1. Physical Damage Coverage
      2. Liability Coverage
    4. Professional Liability Insurance
    5. Employment Practices Liability Insurance
    6. Difference in Conditions Insurance
    7. Commercial Umbrella Insurance
    8. Surety Bonds
      1. Contract Bonds
      2. Judicial Bonds
      3. Other Types of Bonds
    9. Surplus Lines
      1. The Unauthorized Market and Surplus Lines
      2. Conditions for Obtaining Coverage
    10. Federal Terrorism Risk Insurance Act of 2002
      1. Background
      2. Temporary Program
      3. Definitions
      4. General Overview of Program
      5. Insurer Deductibles
      6. Cap on Annual Liability
    11. Exam Prep Questions
    12. Exam Prep Answers
  25. 20. Practice Exam 1
    1. Practice Exam 1 Questions
  26. 21. Answers to Practice Exam 1
    1. Quick Check Answer Key 1
    2. Answers and Explanations
  27. 22. Practice Exam 2
    1. Practice Exam 2 Questions
  28. 23. Answers to Practice Exam 2
    1. Quick Check Answer Key 2
    2. Answers and Explanations
  29. A. What's on the CD-ROM
    1. Review Questions and Exam Simulator
    2. Installing the CD
    3. Customer Service and Ordering
  30. B. Need to Know More
  31. Glossary