Introduction To

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 Chart: Insurers Chance of loss	4 5 6
The Effects of Fraud and/or Theft	9
Facts & Theories of Risk And Insurance The two types of risk The two elements involved in speculative risks	11 12 12
Risk Analysis - Liability Exposures Basic guidelines used to set insurance rates The three ways in which risk is usually stated	16 17 18
The Insurance Policy and Analysis - Perils and Property The basic format of insurance policies Declarations Insuring Agreements Exclusions Conditions and Miscellaneous Provisions Definitions Endorsements And Riders	20 21 21 22 22 22 22 23
The Insurance Policy Layout	25
The Homeowner Series As A Recap: Replacement Value, Actual Cash Value, Market Value	27 28
Section I of Form #1 (HO-1) Section II of Form #1 Consists of Coverage E and F	31 33
Form #2 (HO-2)	33
Form #3 (HO-3)	34
Form #4 (HO-4)	35
Form #5 (HO-5)	35
Form #6 (HO-6)	35
Form #8 (HO-8)	36
The four sections of a homeowner's policy	36
Natural Disasters	39
Volcanoes	42
Hurricanes and Tornadoes	43
Possessions	44
Automobile Coverage First party, second party, third party Three typical parts to an automobile policy Family Automobile Policy (FAP)	46 47 49 51
No-Fault Policies	52
Auto Liability Coverage	54
Property Damage Medical Payments Personal-Injury Protection Collision Comprehensive Coverage Uninsured and Underinsured Motorists Towing and Service/Rental Care Reimbursement Umbrella Insurance	55 55 56 56 57 57 58 58
Negligence Laws	59
Policy Standardization Custom Statute Intercompany Agreements	61 61 62 62
Loss-Adjustment Provisions Notice of Loss	64 64
Processing An Auto Claim Three basic types of negligence laws	66 67
Glossary	69

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