P&C Principles

Table of Contents

Introduction to P&C PRINCIPLES	1
P&C Principles	2
What Insurance Is All About	3
Morale and Moral Hazards	3
Insurers	5
Chance of loss	6
Floater, Endorsement, All-risk	7
The Effects of Fraud and/or Theft	8
Facts & Theories of Risk And Insurance	10
The two types of risk	10
The two elements involved in speculative risks	11
Risk Analysis - Liability Exposures	14
Basic guidelines used to set insurance rates	15
The three ways in which risk is usually stated	15
The Insurance Policy and Analysis - Perils and Property	16
The basic format of insurance policies	18
Declarations	18
Warranties	18
Insuring Agreements	19
Exclusions	19
Conditions and Miscellaneous Provisions	19
Definitions	19
Endorsements and Riders	19
The Insurance Policy Layout	21
The Homeowner Series	22
As A Recap: Replacement Value, Actual Cash Value, Market Value	23
Section I of Form #1 (HO-1)	25
Section II of Form #1 Consists of Coverage E and F	26
Form #2 (HO-2)	26
Form #3 (HO-3)	27
Form #4 (HO-4)	27
Form #5 (HO-5)	28
Form #6 (HO-6)	28
Form #8 (HO-8)	29
The four sections of a homeowner's policy	29
Natural Disasters	31
Volcanoes	33
Hurricanes and Tornadoes	33
Possessions	34
Automobile Coverage	36
First party, second party, third party	37
Three typical parts to an automobile policy	38
Family Automobile Policy (FAP)	40
No-Fault Policies	41
Auto Liability Coverage	43
Property Damage	43
Medical Payments	44
Personal-Injury Protection	44
Collision	45
Comprehensive Coverage	45
Uninsured and Underinsured Motorists	45
Towing and Service/Rental Care Reimbursement	46
Umbrella Insurance	46
Negligence Laws	47
Policy Standardization	49
Custom	49
Statute	50
Intercompany Agreements	50
Loss-Adjustment Provisions	52
Notice of Loss	52
Processing an Auto Claim	53
Three basic types of negligence laws	53
Policy provisions relating to	54
Glossary	56

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