Property & Casualty Insurance - kaplanlearn.com

1 Property & Casualty Insurance 1st Edition, Revised License Exam Manual 1st Edition, Revised Property and Casualty Insurance License Exam Manual Property and Casualty Insurance LEM 1 5/9/2014 12:41:00 PM. At press time, this edition contains the most complete and accurate information currently available. Owing to the nature of license examinations, however, information may have been added recently to the actual test that does not appear in this edition. Please contact the publisher to verify that you have the most current edition.

2 This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional services. If legal advice or other expert assistance is required, the services of a competent professional should be sought. Property AND Casualty Insurance . LICENSE EXAM MANUAL, 1ST EDITION, REVISED. 2010 Kaplan, Inc. All rights reserved. The text of this publication, or any part thereof, may not be reproduced in any manner whatsoever without written permission from the publisher.

3 If you find imperfections or incorrect information in this product, please visit and submit an errata report. Published in April 2010 by Kaplan Financial Education. Revised April 2016. Printed in the United States of America. ISBN: 978-1-4277-2506-6 / 1-4277-2506-3. PPN: 1000-0557. P&C LEM - 2 4/7/2016 1:21:01 PM. Contents Introduction ix U n i t 1 Principles of Insurance 1. Objectives of this Course 2 Elements of Insurability 5. Risk, Exposure 2 Other Insurance Terms 8. Managing Risk 3 Unit Test 10. Insurance 4 Answers and Rationales to Unit Test 12.

4 Law of Large Numbers 5. U n i t 2 The Insurance Contract 15. Elements of a Valid Contract 16 Unit Test 22. Characteristics of an Insurance Answers and Rationales Contract 18 to Unit Test 23. Parts of the Insurance Contract: Declarations, Insuring Agreements, Conditions, Exclusions, and Definitions 20. U n i t 3 Insurance Company Organization and Regulation 25. Types of Insurance Organizations 26 Regulation 38. Lines of Insurance 28 Unit Test 49. Insurance Company Answers and Rationales Organization 30 to Unit Test 52. iii Property and Casualty Insurance LEM 3 5/9/2014 12:41:01 PM.

5 Iv Contents U n i t 4 The Insurance Transaction 55. Application 56 Representations and Warranties 62. Binders 56 Waiver and Estoppel 62. Underwriting the Policy 57 Cancellation and Nonrenewal 62. Rating the Policy 60 Unit Test 65. Certificate of Insurance 61 Answers and Rationales to Unit Test 67. Misrepresentation, Concealment, and Fraud 61. U n i t 5 Introduction to Property Insurance 69. Standardized Policies 71 Exclusions and Limitations 75. How the Remainder of the Course Conditions 77. Is Organized 71. Unit Test 87. Declarations 72.

6 Answers and Rationales Insuring Agreement 74 to Unit Test 89. U n i t 6 Introduction to Liability Insurance 93. Liability Losses 94 Vicarious Liability 99. Negligence 95 Liability Insurance 99. Defenses Against Negligence 97 Unit Test 106. Absolute/Strict Liability 98 Answers and Rationales to Unit Test 108. U n i t 7 Dwelling Insurance 111. The Dwelling Policy 112 Dwelling Policy Endorsements 130. Basic Form (DP-1) 113 Unit Test 134. Broad Form (DP-2) and Answers and Rationales Special Form (DP-3) 122 to Unit Test 137. Dwelling Forms Comparison 128.

7 Property and Casualty Insurance LEM 4 5/9/2014 12:41:01 PM. Contents v U n i t 8 Homeowners Insurance 141. The Homeowners Policy 143 Homeowners Forms Comparison 169. Section I Property 145. Unit Test 170. Section II Liability 160. Answers and Rationales Homeowners Endorsements 166 to Unit Test 173. U n i t 9 Personal Auto Insurance 177. Introduction 178 Parts E and F Conditions 195. Organization and Eligibility 180 Underinsured Motorists Coverage 197. Definitions 180. Personal Auto Policy Part A Liability Coverage 182 Endorsements 197.

8 Part B Medical Payments No-Fault Insurance 198. Coverage 187. Assigned Risk Plans 199. Part C Uninsured Motorists Coverage 188 Unit Test 200. Part D Coverage for Damage to Answers and Rationales Your Auto 191 to Unit Test 203. U n i t 1 0 Miscellaneous Personal Insurance 207. Introduction 209 Personal Watercraft Insurance 216. Flood Insurance 209 Personal Umbrella Insurance 218. Earthquake Insurance 212 Fair Plans 219. Mobile Home Insurance 213 Unit Test 221. Personal Inland Marine Answers and Rationales Insurance 213 to Unit Test 223.

9 U n i t 1 1 The Commercial Package Policy 227. Introduction 228 Unit Test 233. Eligible Coverages 228 Answers and Rationales to Unit Test 234. Common Policy Declarations 230. Common Policy Conditions 230. Property and Casualty Insurance LEM 5 5/9/2014 12:41:01 PM. vi Contents U n i t 1 2 The Businessowners Policy 237. Introduction 238 Endorsements 263. Eligibility, Policy Organization 239 Comparison of Commercial Package Policy and Businessowners Property Coverage 241 Policy 265. Liability and Medical Expenses Unit Test 2664.

10 Coverage 256. Answers and Rationales Conditions 262 to Unit Test 268. U n i t 1 3 Commercial Property Insurance 271. Commercial Property Coverage Extra Expense and Legal Liability Part 273 Coverage Forms 289. Building and Personal Property Causes of Loss Forms 290. Coverage Form 275. Endorsements 298. Builders Risk Coverage Form 283. Unit Test 299. Condominium Coverage Forms 285. Answers and Rationales Business Income Coverage to Unit Test 303. Forms 286. U n i t 1 4 Ocean and Inland Marine Insurance 307. Ocean Marine Insurance 310 Nonfiled Forms 328.