Business Law II Chapter 19
INSURANCE LAW– GOTCHA COVERED
1. ______– written agreement made with an insurance company. In return for payment on the insurance, company agrees to pay you if ______occurs. Purchased in an attempt to avoid having to make large, unexpected payments when accident or illness occurs.
a. ______– the written agreement; provides maximum dollar amount for which company is liable
b. ______– the potential for loss arising from injury to or death of a person or from damage or destruction of property from a specified peril
c. ______– payment made for insurance coverage (usually paid monthly, semiannually, or annually); increases in cost as amount of coverage increases
d. ______interest – purchaser of insurance must be able to prove they would suffer ______if the insured property or person is injured or dies
1) In ______, anyone who would suffer a direct and measurable ______loss can insure the property
2) In ______, one must demonstrate there is a ______they would suffer direct financial loss. Creditors may insure their debtors, businesses may insure ______, spouses may insure one another, etc.
2. Common Types of Insurance
a. ______Insurance – pays ______a set amount upon the death of a specified person
1) ______Insurance – written for a certain number of years. Beneficiary receives face value if insured dies within the policy term. If term ends before death of insured, there is no obligation to pay. ______insurance is the least expensive….as the policy gets older, it pays less in a claim.
2) ______Life Insurance – AKA as ordinary or straight life insurance. Requires constant premium payments for life of insured or until age 100. Portion goes into savings program against which insured can borrow.
3) ______Life Insurance – time typically runs until retirement age. Beneficiary receives face value if insured dies during term. If insured lives to end of term, policy owner is paid (endowed) with face value of policy.
4) ______– typically excuse insurer from obligation to pay death benefit under certain situations (death caused in crash of private plane, terrorism, military service, etc.)
5) ______Clause – Prohibits insurer from refusing to perform due to misrepresentation or fraud after policy has been in effect (often one or two years).
6) ______Period – Time in which overdue premium can still be paid and keep policy in effect.
7) ______– Provision can be added requiring insurer to pay twice the face amount if death is accidental.
b. ______Insurance – Coverage for loss or damage due to fire and smoke.
1) ______fire policy covers direct loss resulting from fire, lightning strike or removal of items from premises endangered by fire
2) ______– AKA ______; attached to standard policy to extend coverage and make it unnecessary to determine how much damage comes from one type of event over another (windstorm, hail, explosion, riot, etc.)
3) Proving loss is three-fold:
a) There was an ______fire.
b) Actual fire was ______. (Started by accident, negligence or deliberate act uncontrolled by insured; or friendly fire that becomes uncontrollable.
c) Fire was the ______—natural and forseeable cause of the loss.
4) ______– clause that requires insured to maintain coverage equal to a certain percentage of total current value of property.
c. ______Insurance – Coverage for situations which may be intentional, negligent, or accidental acts of others as well as mere chance.
1) Insurance against ______activity – embezzlement, burglary, fraud, etc.
2) ______insurance – indemnifies for losses arising from ownership and operation of motor vehicles
a) ______coverage – covers insured when accused of negligent ownership, maintenance, or use of a motor vehicle.
(1) Extends to borrowed cars (with owner’s permission) and when insured has loaned his/her car to another.
(2) Pays for bodily injury/death of third parties and damage to property of third parties
b) ______coverage – pays for medical claims of occupants of insured’s vehicle who are injured. Also covers insured when in another’s vehicle; also while walking, bike riding, etc.
c) ______insurance – provides coverage for insured’s own vehicle when colliding with another object or overturning.
d) ______insurance – indemnifies against all other damage (fire, theft, water, vandalism, hail and glass breakage).
e) ______motorists coverage – allows insured to collect from own insurance when person causing the damage has no insurance.
f) ______motorists coverage – compensates insured when negligent driver does not have sufficient coverage.
g) ______insurance – some states require parties involved in an accident to be covered by their own insurance company, regardless of who was at fault. (If medical claims exceed set amount, injured party can sue.)
h) ______clause – extends auto insurance coverage to members of the insured’s household.
i) Reading the numbers:
(1) 50/100/50
= bodily injury $50,000 per ______
= bodily injury $100,000 per ______
= ______damage $50,000
3) ______insurance – provides protection against claims from those who are injured as a result of negligence or other torts committed by the insured.
a) Is a major part of auto insurance (______) as well as homeowner’s and renter’s insurance.
b) Personal service providers such as beauticians are wise to carry liability insurance.
c) ______insurance is another type of liability coverage – protects ______(doctors, lawyers, etc.) against malpractice claims brought by patients/clients.
4) ______, ______, or ______insurance – provide coverage for hospital bills and loss of income resulting from accident or illness
d. ______Insurance – provisions of the Social Security Act and others
1) ______Insurance – eligible person can begin receiving Social Security retirement insurance as early as age 62. Those born in 1960 or after cannot collect until age 67.
2) ______Insurance – widow, widower, and dependent children can receive benefits
3) ______Insurance – must establish that the condition is physical/mental and expected to continue indefinitely or result in death.
4) Health Insurance (______) – provides two basic programs
a) Hospital insurance to pay for hospitalization and follow-up treatment
b) Medical insurance to pay for physician services, ambulance, etc.
e. ______Insurance – protects against loss of or damage to vessels, cargo and other property exposed to sea perils. (oldest type of insurance)
f. ______Insurance – originally covered personal property while being transported anywhere but on the ocean, as across land or inland waterways.
1) Now designed to cover whether in transport or not, but the carrier (car, plane, train, is not covered)
2) ______was added – covers any and all of insured’s personal property against almost any peril regardless of location.
3) Term ______means that the protection floats with or follows the property.
g. ______Insurance – purchased to provide protection from loss when homes are damaged
1) Covers damage from fire, vandalism, theft, etc.
2) Also protects from loss due to ______(i.e. wind and lightning; some areas will also provide earthquake and flood insurance at additional rates)
3) Includes ______insurance – protects you if someone is injured while on your property, even if you are careless
4) ______insurance is similar coverage, for those who do not own their property (protects contents of house or apartment; includes liability insurance)
h. ______and ______Insurance – provides protection against financial loss caused by dishonesty.
i. ______Insurance – covers ______expenses from ______
1) May ______certain illnesses or types of treatment
2) Many ______provide some coverage
3) ______– those kinds of expenses which are paid
a) Some provide hospital costs, doctor bills, special expenses like ambulance service, etc.
b) Some pay to the policy holder an amount of money for each day of illness or injury
3. Insurer of ______– Lloyd’s of London
a. Famous for insuring ______, such as dancers’ legs, pianists’ fingers, etc.
b. At one time, there was nothing they wouldn’t cover.
4. Insurance industry is spreading out into an even broader range of coverage areas – ______insurance, ______insurance, ______insurance, ______insurance, ______insurance, etc.
https://www.geico.com/more/saving/insurance-101/unusual-insurance-policies/