Trivia Flashcards

Which rating factor is generally NOT used to calculate personal auto insurance premiums?

Answer: Driver's religion

Religion is not a permissible rating factor; insurers use actuarially justified factors such as age, marital status, and vehicle type.

Under a commercial general liability (CGL) policy, what does 'occurrence' trigger mean?

Answer: Coverage applies when the policy is in force at the time of the injurious event

An occurrence-based policy covers losses that happen during the policy period, regardless of when the claim is filed.

What is the primary purpose of workers' compensation insurance?

Answer: To provide medical and wage benefits to employees injured on the job

Workers' compensation provides no-fault benefits including medical care and lost wage replacement for work-related injuries or illnesses.

Which term describes the maximum amount an insurer will pay for a covered loss under a policy?

Answer: Policy limit

The policy limit (also called the limit of liability) is the maximum dollar amount the insurer will pay for a covered claim.

A property insurance policy that pays the cost to repair or replace damaged property without deducting depreciation is known as:

Answer: Replacement cost coverage

Replacement cost coverage pays the full cost to repair or replace property with like kind and quality without depreciation deductions.

Which document is issued to an insured as evidence of coverage and lists the key details of the insurance contract?

Answer: Declarations page

The declarations page (dec page) summarizes the policyholder's name, covered property, policy period, premiums, and limits.

Under an umbrella liability policy, 'drop-down coverage' refers to:

Answer: The umbrella paying when underlying limits are exhausted or a self-insured retention applies

Drop-down coverage means the umbrella policy 'drops down' to cover losses when underlying insurance is insufficient or absent.