Insurance Symbols and Coverages: A Comprehensive Guide, Exams of Nursing

Download Insurance Symbols and Coverages: A Comprehensive Guide and more Exams Nursing in PDF only on Docsity! Washington State Property and Casualty Insurance Exam Over 300 Questions "Unsure" portion of premium - Correct answer money must be returned to the insured no later than 45 days after date of cancelation. (DRPL) Designated Responsible Licensed Person - Correct answer Responsible for insurers compliance with insurance laws/ rules (NFIP) National Flood Insurance Program - Correct answer Identifies floodplains and maps thru FEMA. The community must meet the federal requirements and must purchase within 1 year after becoming available. *- structures must have two solid walls and a roof. Be partially above ground, and not entirely over water. (WYO) Write Your Own insurance program - Correct answer the same insurance you would receive in the NFIP...non risk baring though the FIA 3 Elements of insurable risk - Correct answer 1. Financial (a monetary interest) 2. Blood (a relative) 3. Business (a business partner) 5 basic individual rate-making approaches - Correct answer 1. Judgment rating 2. Schedule Rating 3. Experience Rating 4. Retrospective Rating 5. Merit Rating 1033 waiver - Correct answer a personal convicted of a felony may apply for a ____ to transact insurance business. Cannot be 50k+ for each violation. Abandonment - Correct answer the relinquishing of insurance legal right or interest in an insurance policy. In property and casualty insurance, assignments of polices are valid Acceptance - Correct answer when underwriting approves the application and approves a policy Accident - Correct answer an unexpected happening that may result in injury, loss, or damage. P a g e 1 | 30 According to the state regulations pertaining to claim settlements, after receiving a notification of claim from an individual policyholder, the insured must acknowledge the notice within how many days? - Correct answer 10 working days (business days) Actual Cash Value (ACV) - Correct answers the required amount to pay damages or for property loss, which is calculated based on the property's current replacement value minus depreciation. Additional/Supplementary Coverage - Correct answer a provision in an insurance policy that provides an additional amount of coverage for specific loss expense, at no additional premium. Additionally Insured - Correct answer Individuals or businesses that are not named as insured on the declarations page, but are produced by the policy, usually in regard to a specific interest. Additionally insured are added though endorsements. Admitted Insurer - Correct answer an insurer to which a state insurance department has granted a license to do business within that state. After insurer termination of independent agent they must: - Correct answer permit renewal of all polices in insurance book for 1 year. - rate of commissions transfers - must assign policy to nearest located insurer Aggregate Limit - Correct answer the maximum amount an insurer will pay for all covered losses during the covered policy year. Agreed Value - Correct answer the accepted value of a non-cash asset at the time of its contribution by the owner Alien Insurer - Correct answer an insurance company that is incorporated outside the United States and does business within. An insured has a personal auto policy with both comprehensive (other-than-collision) and collision coverage. His car is stolen and recovered five days later. If the insured claims transportation expenses of $20 per day, how much will his policy pay? A) $45 b) $60 c) $75 D) $100 The policy will pay $20 per day after 48 hours, not to exceed 30 days in total. - Correct answer b) $60. P a g e 2 | 30 Business Entity Affiliates - Correct answer a business must have AT LEAST 1 affiliated individual license to transact insurance Business income agreed value - Correct answer financial data for the previous 12 months Business income and extra expenses - Correct answer provides coverage for expenses incurred as a result of extortion threat or ecommerce incident Business Owners Policy (BOP) - Correct answer Package policy designed to provide broad property and liability coverage for small businesses. Business Personal Property - Correct answer Moveable property used for business within 100 feet of premises max coverage is 10k Can you keep or retain a policy for safekeeping? - Correct answer No, not under any circumstance Cancelation/Nonrenewal (auto) - Correct answer 10 days’ notice for nonpayment 20 days for any other reason (auto) Cancellation - Correct answer the termination of an in-force insurance policy by either the insured or the insurer prior to the expiration date shown in the policy. Cannot deny based on - Correct answer gender Sex Age Credit score Change of Address - Correct answer must contact commissioner within 30 days. This includes a change of residence, mailing, business, or email Claim Settlement Options - Correct answer - the value of loss or damaged property - cost of repair or replacement - cost of taking all or part of the property at an agreed or appraised value - cost of repairing, rebuilding or replacing the property of like kind and quality Claimant - Correct answer either the first party, third party or both. Can include immediate family members designated by client Class rating (manual rating) - Correct answer the practice of computing a price per unit of insurance that applies to all applicants possessing a given set of characteristics. Coinsurance - Correct answer a provision under which both the insured and the insurer share the covered losses. P a g e 5 | 30 This encourages the insured to ensure the property closer to its full value Coinsurance Penalty - Correct answer the amount of insurance carried over the amount of insurance should have had, multiplied by loss, which equals the reduced payment of loss. Example: for a $100K building insured at 80% coinsurance. The insured would carry at least $80K ($100K x.80) to meet the insurance requirement. Example 2: only carried $40K of insurance and had a 10K loss, they would bear 50% of the loss due to deficiency, or 5K and any deductible Combined Single - Correct answer a single dollar limit of liability applying to the total of damages for bodily injury and property damage combined, resulting from one accident or occurrence. Commercial Crime (Employee Dishonesty) - Correct answer (ISO) Coverage A Also known as Fidelity, is defined as the loss of company money, securities, and other property caused by employee theft, burglary, or robbery Commercial Crime Form Classifications (two types) - Correct answer 1. Discovery Form 2. Loss Sustained Form Commercial Crime Insurance - Correct answer Insurance that covers (1) money and securities against numerous perils (not limited to crime perils) and (2) property other than money and securities against crime perils, such as employee theft, robbery, theft by outsiders, and extortion. Commercial General Liability - Correct answer Section I - Coverage’s Coverage A - Bodily Injury and Property Damage liability Coverage B - Personal and Advertising Injury Coverage C - Medical Expense Section II - Who is an Insured? Section III - Limits of Insurance Section IV - Conditions Section V - Definitions Commercial Package Policy (CPP) - Correct answer a policy that covers two or more lines of business by combining ISO's commercial lines coverage parts. Commercial Package Policy Coverage’s - Correct answer 1. Commercial general liability 2. Commercial property 3. Inland marine P a g e 6 | 30 4. Commercial auto 5. Equipment breakdown 6. Crime 7. Farm Commercial policy cancelation - Correct answer written notice (no time limit) Commercial property form structure - Correct answer 1. General liability 2. Commercial property 3. Inland marine 4. Commercial auto 5. Equipment breakdown 6. Crime 7. Farm Commercial Property Insurance - Correct answer covers property losses resulting from fire, storms, accidents, theft, and vandalism Compensatory vs. Punitive Damages - Correct answer Compensatory: are intended to compensate Punitive: are intended to punish Competent Parties - Correct answer those entering into the contract must be of legal age and must be mentally competent and not under the influence of explicit drugs Components - Correct answer factors that determine rates, including loss reserves, loss adjusting expenses, operating expenses and profits Concealment or Fraud - Correct answer Specifies that the policy may be voided if there is material concealment, misrepresentation, or fraud on the part of the insured. Conditions - Correct answer the section of an insurance policy that indicates the general rules or procedures that the insurer and insured agree to follow under the terms of the policy. Consequential Loss - Correct answer a loss not directly caused by a peril insured against but arising indirectly. Ex: Store catches fire, creating loss of income after fire Consideration - Correct answer something of value exchanged for something else of value Consumer Reports - Correct answer Written and /or oral statements regarding a consumer's credit, character, reputation, or habits collected by a reporting agency from employment records, credit reports, and other public sources. P a g e 7 | 30 - Rental value +add live expenses - Reasonable repairs - Property repairs - Property removed DP-1 Basic Form - Correct answer Perils insured against are fire, lightning, and internal explosion. DP-2 Broad Form - Correct answer this dwelling coverage form covers perils included under the DP-1 with ECE and optional VMM endorsement attached, plus: burglars; falling objects; weight of snow, ice, sleet; accidental discharge or overflow of water or steam; sudden and accidental tearing apart, cracking, burning or bulging of a steam or hot water heating system, or an air conditioning or automatic fire protective sprinkler system, or an appliance for heating water; freezing of a plumbing, heating, air conditioning, or automatic fire protective sprinkler system, or of a household appliance; and sudden and accidental damage from artificially generated electrical current. DP-3 Special Form - Correct answer an all risk policy (on the structure coverage only), in which anything not excluded is covered. Contents (if covered) are still named peril, as in the DP-2. Includes all DP-1 and DP-2 coverage. Duties after a loss - Correct answer - Protect the damaged property from further damage - Prepare an inventory of damaged property - Cooperate with the insurer in settling the loss - Notify the police in case of a theft loss - Submit to the insurer a signed sworn proof of loss within an allotted amount of time after being requested to do so. Duty to Defend - Correct answer Insurer's duty to assume the expense of defending the insured in litigation and lawsuits. Dwelling Coverage A - Correct answer The Dwelling itself and attached structures, materials and building equipment Dwelling coverage A NOT included - Correct answer Land, including land on which the dwelling described in the declarations is located Dwelling Coverage B - Correct answer Other Structures such as detached garages and other outbuildings (e.g. sheds & fences) or structures with used for business with defined parameters P a g e 10 | 30 Dwelling Coverage B NOT Included - Correct answer - Land where other structures are located - Structures rented or held for rental - Other structures that are used for business (commercial, manufacturing and farming) - Grave Markers Dwelling Coverage C - Correct answer - personal property. Located on described location - Model or hobby aircraft including parts - Motor vehicles but only if servings handicapped or the premise. -Rowboats/canoes - Blank storage media and prepackaged computer software - Property moved to a newly acquired residence for 30 days Dwelling Coverage C: Exclusions - Correct answer - Coins, currency, bills, deeds passports, manuscripts - Animals -aircraft flyable - Watercraft (with motor) - Motor vehicles - Restoration of data - Credit cards etc. - Water or steam - Grave markers and mausoleums Dwelling Coverage E - Correct answer Additional Living Expenses on broad or special form. The policy is triggered only with direct damage claim (A, B, C) is covered by this policy. - Repairs - Payment for loss 2 weeks Dwelling Policy - Correct answer Policy that provides Property coverage to individuals and families. Covers dwellings, other structures, personal property, and fair rental value. Some versions also cover additional living expense. The unendorsed policy does not provide liability coverage. Earth Movement (earthquake) - Correct answer excluded in all polices but usually can be purchased separately. 72 hours is considered a single incident Electronic data - Correct answer pays up to $2,500 per year for data losses. Can be increased. Elements of a Contract - Correct answer offer, acceptance, consideration P a g e 11 | 30 Elements of Negligence Act - Correct answer 1. Legal Duty 2. Standard of care 3. Unbroken chain of events 4. Actual loss or damage Endorsements - Correct answer printed addendums to a contract that are used to change the policy's original terms, conditions, or coverage’s. Must be attached to the policy and signed by executive officer. It may be used to add or cancel parts of policy as well as correct mistakes/ typos. Equipment breakdown insurance - Correct answer covers losses due to the accidental breakdown of covered equipment Estoppel - Correct answer is a legal process that can be used to prevent a party to a contract from re-asserting a right or privilege after or after that right or privilege has been waved. The legal consequence of waiver Examination of books and records - Correct answer the insurer is granted the right to audit books and records of the insured relating to the policy for a period of up to 3 years (36 months) after the end of the policy Examples of Conditions - Correct answer - Inspections - Changes to the policy - Liberalization clause - Return of premium Excess Charge - Correct answer allowing insurers to charge a reduction fee, overall charges must be reasonable to the value of work. Excess Policy - Correct answer a policy that only pays for loss after the primary policy has paid its limit. Exclusions - Correct answer Section of an insurance policy that lists property, perils, persons, or situations that are not covered under the policy. Exclusions of a flood - Correct answer landslides, sewer backups unrelated to a flood, windblown rain, snow or sleet and flooding within the insured’s control. Experience Rating - Correct answer the insured's own past loss experience enters into the determination of the final premium. Express Authority - Correct answer the authority of an agent, stated in the document or agreement creating the agency P a g e 12 | 30 - should never be claimed as guaranteed backing to insurance (unfair trade practice) Guilty of violations - Correct answer each fine of up to $1,000, must be paid within 15-30 days Hazard - Correct answer a condition that increases the frequency or severity of a loss. HO-2 (broad form) - Correct answer covers the dwelling, other structures, and personal property on a named perils basis HO-3 (special form) - Correct answer covers the dwelling and other structures on a risk-of- direct-physical loss basis. All direct physical losses are covered except those losses specifically excluded. Personal property is covered on a named perils basis HO-4 (contents broad form) - Correct answer covers a tenant's personal property on a named perils basis HO-5 Comprehensive Form - Correct answer provides open perils coverage ("all-risks coverage") on the dwelling, other structures and personal property.lanlord furnishing up to $2,500 HO-6 Coverage A - Correct answer - Land, structures rented/private garage. - Business structures solely owned by insured or tenant and used to store business property HO-6 COVERAGE C - Correct answer -Personal Property -guests property HO-6 Coverage D (loss or use) - Correct answer - Additional living expenses - Fair rental value - Civil authority prohibits use HO-6 Unit Owners Form (condo users) - Correct answer covers personal property on a named perils basis. A minimum of $5,000 of insurance is also provided on the condominium unit that covers improvements and additions HO-8 Covered Perils - Correct answer -Theft coverage $1,000 - Worldwide coverage, limited to 10% or $1,000 - Debris Removal -Trees, plants and shrubs ($500 max each) - Property Guests or employees - Coverage A&B functional replacement cost basis - Glass or safety glazed materials limited to $100 Home daycare coverage - Correct answer may be attached to the policy to cover the liability exposer associated with the business. P a g e 15 | 30 Homeowners cancellation - Correct answer The effective date of cancellation cannot be before the 10th day after the insurer mails notice if the insurer cancels for non-payment of premium; or the 30th day after the insurer mails notice if the insurer cancels for any other reason. Homeowners Forms - Correct answer HO2- named H0-3 open and named peril H0-4 named (renters) H0-5 Open peril, 1-4 unit owner occupied HO-6 named peril, condos Ho-8 Named peril (historic/elaborate home) Homeowners policy may be used for the following - Correct answer - 1 to 4 family owner- occupied residences - No more than 2 families or 2 roomers/boarder - Various ownership types and building stages -construction, townhomes, and duplexes. Homogeneity - Correct answer the degree to which terms are similar How many days to share a customer report? - Correct answer 3 days How often must the Insurance Commissioner examine companies? - Correct answer as often as deemed necessary, but MUST be done every 5 years Identity Fraud Expense Coverage - Correct answer Provides for reimbursement of expenses incurred as a result of identity theft or fraud. Covered expenses up to the $15,000 limit, including reasonable attorney fees to defend suits. If an insurer cancels a contract, written notice must be provided to the insured within what a certain period of time. - Correct answer 45 days prior to cancelation *unless from non-paid premiums (10 days) If business Entity Affiliate is terminated - Correct answer the commissioner must receive notice within 30 days of termination. Implied Authority - Correct answer Authority that is not expressed or written into the contract, but which the agent is assumed to have in order to transact the business of insurance for the principal. Increased Cost of Construction - Correct answer this additional coverage covers the additional costs required to a comply with building codes when a building is damaged by a covered cause P a g e 16 | 30 of loss. It is only available for buildings on a replacement cost basis and maximum amount payable is 5% of the building or $10,000. Indemnity - Correct answer reimbursement; the principle of insurance to take you back to the state prior to the loss. Individual knowingly (willfully) violates the Fair Credit Reporting act - Correct answer Agent: 2 years in prison Individual: a $2,500 fine Individual unknowingly violates the Fair Credit Report Act - Correct answer is liable for the amount equal to the loss as well as any legal fees Inducement - Correct answer an action aimed at persuading Inducement - Correct answer illegal action. Referring to rebating to have someone purchase a policy for a reward. Inflation Guard - Correct answer a coverage extension that automatically increases amounts of insurance on buildings by an agreed upon percentage annually Insolvent - Correct answer Bankrupt; unable to pay debts. Inspections and Surveys - Correct answer insurer's right, but not duty, to inspect the insured operations during the policy period; insurer may give insured the report and recommendations but is not required to do so. Cannot warrant that conditions are safe and comply with laws, codes etc. Insurance Code: Remedies & Penalties - Correct answer - Cease and desist order form commissioner - If not followed within 10 days of order a max fine of $250 will be issued for each violation Insurance Commissioner (IOC) - Correct answer State elected term of 4 years. Insurance Commissioner Duties - Correct answer -Protects the Public from unfair trade practices - Examinations/investigations - Hearings - Cease and Desist orders - Public information - Appoints Dep. Chief Commissioner - P a g e 17 | 30 Formula: (Incurred losses + loss adjusted expenses)/ Earned Premium Loss Sustained Form - Correct answer Form that covers losses actually sustained during the policy period and discovered no later than one year after policy expiration. Market Value - Correct answer the amount for which something can be sold on a given market prior to loss Material Misrepresentation - Correct answer - a false statement that changes the outcome of issuing a policy - Generally with the health statement - If found to be intentional is considered fraud medical malpractice insurance - Correct answer a type of liability insurance that covers physicians and other health care professionals for liability claims arising from patient treatment. Medical malpractice insurance cancelation - Correct answer 90 days’ notice of cancelation Merit Rating - Correct answer base on not having an actual loss record but other factors that indicate the probability loss will occur. Ex: Bad driving record, but not at fault accidents Methods of Handling Risk - Correct answer Avoidance Retention Sharing Reduction Transfer Methods of satisfying financial responsibility - Correct answer Split limits: 25/50/25 Or combined single: One lump sum to cover bodily injury and property damage. Misrepresentation - Correct answer Materials that are false, misleading, or deceptive of policy benefits, terms, payment of dividends. Also includes oral statements. Knowingly committing this is considered a gross misdemeanor, and licenses can be revoked Mobile Equipment - Correct answer various types of vehicles designed for use principally off public roads, such as bulldozers and cranes. Moral Hazard - Correct answer when the act of insuring an event increases the likelihood that the event will happen P a g e 20 | 30 Morale Hazard - Correct answer a condition of carelessness or indifference that increases the frequency or severity of loss. Mutual Insurance Company - Correct answer a type of insurance company owned by its policyholders. Can share dividends Named Insured - Correct answer the individual(s) whose name appears on the policy's declaration. Named Peril - Correct answer a specific cause of loss listed and described in an insurance policy. Also used to describe policies containing named perils. Newly Acquired or Constructed Property - Correct answer this coverage extension applies to Coverage A and Coverage B. It provides up to $250,000 for each new building for up to 30 days. It also provides for Coverage B Business Personal Property up to 30 days located at newly acquired or constructed buildings up to $100,000. NFIP National Flood Insurance Program Limits - Correct answer Single Family: Building-$250,000. Contents- $100,000 Other Residential: Building- $250,000. Contents- $100,000 Small Businesses: Building- $500,000 Contents: $500,000 Other Non-Residential: Building- $500,000 Contents- $500,000 *if a community has NFIP they must purchase flood insurance as part of the mortgage process. No Benefit to Bailed - Correct answer a provision that excludes any assignment or granting of any policy provision to any person or organization holding, storing, repairing, or moving insured property for a fee. Non-admitted Insurer - Correct answer an insurer that is not licensed to business in a particular state. (A surplus lines broker works with non-admitted carriers) Non-Renewal - Correct answer the termination of a policy at the expiration of its term. The policy does not renew and no coverage is provided after the expiration date. Non-Resident Producer - Correct answer a producer who lives (domicile) and conducts business from another state other than Washington. Will receive a nonresident producer’s license. Nonoccurrence - Correct answer a situation in which other insurance is written on the same risk, but not on the same coverage basis. P a g e 21 | 30 No owned detached trailers - Correct answer this coverage extension covers up to $5,000 (unless higher limit shown in declarations) for when a no owned trailer is left with the insured to unload. Notice of Cancellation - Correct answer to cancel your policy, your insurance company must mail notice or be delivered Notice of Hearing - Correct answer - must state grounds of hearing (can be written demand by aggrieved person) - Right to request administrative law judge Obsolescence - Correct answer depreciation in value of the property due to becoming outdated Occurrence - Correct answer a loss that occurs at a specific time and place or over a period of time. Offer - Correct answer a promise or commitment to perform or refrain from performing some specified act in the future. Ordinance or Law - Correct answer Broad and Specialty form polices allow up to 10 allow up to 10% of coverage A (orb if there is no coverage limit for A) if owned. Clean up of pollutants. Other coverage’s DP broad & special forms - Correct answer - Lawns, trees, shrubs, and plants $500 per or 5% of amount of coverage -Breakage if glass -Collapse Other Insurance - Correct answer a provision in an insurance policy that defines how the policy will respond if there is other valid insurance written on the same risk Outdoor Property - Correct answer outdoor fences, radio and television antennas, signs which are not attached to buildings, and trees, shrubs and plants (other than "stock" held for sale)... The most the insurance company will pay for loss under this extension is $1,000, and not more than $250 for any one tree, shrub or plant. Over insurance - Correct answer an excessive amount of insurance that would result in overpayment to the insured in the event of a loss. * It is prohibited as it violates the principle of indemnity Over insurance Provision (property insurance) - Correct answer the use of the special provision to cover the cost of repair or replacement of property P a g e 22 | 30 Reasonable Expectations - Correct answer a concept which states that the insured is entitled to coverage under a policy that a sensible and prudent person would expect it to provide. Reinforces the rule that ambiguities in insurance contracts should be interpreted in favor of the policyholder. Rebating - Correct answer the practice of giving an individual a premium reduction or some other financial advantage not stated in the policy as an inducement to purchase the policy. It May not exceed $100 per person in a 12 month period. Receiving Written Notice from Commissioner - Correct answer the person must respond within 90 days. If not made the request is considered waved. Record Retention - Correct answer requires insurer to maintain records for 5 years. Reduction - Correct answer reducing the amount of exposer to risk Renewal - Correct answer the initial licenses are valid from the date that they are issued until the last day of the licensee's birth month. Renewal Fees for Licenses - Correct answer (Every 2 years) Producer- $55 Limited insurance- $20 Surplus lines broker- $20 Adjuster- $50 Late Fees: 30 days: 50% of renewal 31-60 days: 100% 61-12 months 200% (12+ months must restart licensing process) Retention - Correct answer a method of dealing with risk by intentionally or unintentionally keeping a portion of it for the insured's account; the amount of responsibility assumed but not reinsured by the insurance company. Replacement cost - Correct answer the cost to repair or replace property using new materials of like kind and quality with no deduction for depreciation. Reply to the Insurance Commissioner - Correct answer must be done within 15 days Reporting of Actions - Correct answer you must report to the commissioner within 30 days of any administrative action taken on them by another jurisdiction or governmental agency P a g e 25 | 30 Representations - Correct answer are statements believed to be true to the best of one’s knowledge, but are not guaranteed to be true. Retroactive date endorsement - Correct answer Limits coverage under the discovery form version by providing a cutoff date for losses that occurred before the policy inception. Retrospective rating - Correct answer a self-rating plan under which the actual losses during the policy period determine the final premium (subject to a minimum and maximum premium). Risk - Correct answer uncertainty concerning the occurrence of a loss Schedule Rating - Correct answer Rates are developed by applying a schedule of charges and credits to some base rate to determine the appropriate rate for an individual exposure. Scheduled insurance - Correct answer is an insurance policy that lists specific items that will be covered by the insurer. Scheduled property is often included as a supplement to a primary insurance policy. Scheduled Personal Property - Correct answer endorsement - provides broader coverage for personal jewelry, furs, cameras, musical instruments, silverware, fine arts, golf equipment, and stamp/coin collections. Must be insured on full value basis.25% of the amount or $10,000 Separate Account Requirement - Correct answer Witching Fiduciary Capacity: all premium or returned premiums must be accounted for and in a separate account. (May be interest barring accounts and held by producer to help with bank fees/charges) Sharing - Correct answer a method of dealing with risk for a group of individual persons or businesses with the same or similar exposure to loss who share the losses that occur within that group. Signs Coverage Form - Correct answer covers neon, mechanical, and electrical signs fir $2,500 Single-family dwelling are automatically provided with replacement cost insurance to ___% of the replacement value maximum allowed under FIP. - Correct answer 80 Special Peril/Open Peril (All Risk) - Correct answer covers all perils except for those that are specifically excluded. If it doesn't state it's not covered then it is covered. **if there is a dispute over whether something is covered it** Specific Insurance - Correct answer a property insurance policy that covers a specific kind or unit of property for a specific amount of insurance. P a g e 26 | 30 Split Limits - Correct answer the limits of liability for different coverage’s. The limits may be stated per person, per occurrence, or per period basis. (Many autos polices) Example: 25/50/25 25k for single person 50k for bodily injury to 2+ people 25k for damaged property of others Spoilage Endorsement - Correct answer Ads coverage for the insured's perishable stock Spoilage Endorsement - Correct answer Endorsement used with the Building and Personal Property and Condominium Commercial Unit-Owners Commercial Property coverage forms. It adds coverage for the insured's perishable stock - personal property that must be maintained under controlled conditions to protect it from loss or damage. Stacking (auto insurance) - Correct answer the ability to combine the limits of two or more applicable auto insurance policies for a single incident. If there is more than one auto policy in force at the time of loss, stacking those policies' limits may be possible in some circumstances Standard Mortgage Clause (loss payable clause) - Correct answer basic provision for all property policies for "Real" Property Stock Insurance Company - Correct answer an incorporated insurance company with capital divided into shares and owned by the shareholders. Profits are shared by the stockholders. Policyholders are NOT entitled to share in company profits. Strict Liability - Correct answer an implied warranty that the product is safe. Businesses are liable for defective products, regardless of fault or negligence. Subrogation - Correct answer the insurer's legal right to seek damages from third parties, after it has reimbursed the insured for the loss. Based on the principle of immediately Surplus Lines - Correct answer Insurance that is not available or offered in the regular marketplace from admitted insurers. Suspended license period - Correct answer up to 12 months Temporary Insurance Producers License - Correct answer Commissioner may issue temp. License for a max of 180 days. Usually in event of producer’s recovery, sale of a business, training and licensing of new personal to operate a business. The law of agency - Correct answer the law that governs the relationship between a principal and his or her agent. P a g e 27 | 30