Flashcards29 cards
P&C flashcards
Each card is a term with a near-twin: a look-alike term with a different meaning. Say the twin before you flip, then check the back: if you named the twin and the difference, the card is done.
Card 01
Moral hazard
Dishonesty that raises the chance of loss, such as inflating a claim. Near-twin: morale hazard. Full comparison: moral vs morale hazard.
Card 02
Morale hazard
Indifference to loss because insurance exists: leaving the keys in the car. Near-twin: moral hazard, which is dishonesty.
Card 03
Peril
The cause of a loss: fire, windstorm, theft. Near-twin: hazard, the condition that makes a peril more likely.
Card 04
Warranty
A statement guaranteed true and made part of the contract; a breach can void coverage. Near-twin: representation.
Card 05
Representation
A statement the applicant believes true. Only a material misrepresentation lets the insurer void the policy.
Card 06
Concealment
Staying silent about a material fact the applicant knows. Near-twins: misrepresentation and warranty breach.
Card 07
Waiver
Voluntarily giving up a known right. Near-twin: estoppel, which stops a party reasserting that right once the other side relied on the waiver.
Card 08
Apparent authority
What the public reasonably believes the agent can do; it binds the insurer. Near-twins: express (in the agency contract) and implied (needed to carry out the express).
Card 09
Foreign insurer
Chartered in another state. Alien means another country; domestic means this state.
Card 10
Non-admitted insurer
Not licensed in the state; reached through a surplus lines broker, with no guaranty fund behind it. See admitted vs non-admitted insurers.
Card 11
Twisting
Misrepresentation that gets a client to replace a policy with a different insurer. Near-twin: churning, the same move with the same insurer.
Card 12
Rebating
Giving back part of the commission, or anything of value, to induce a sale.
Card 13
Actual cash value (ACV)
Replacement cost minus depreciation. It is not market value. See ACV vs replacement cost.
Card 14
Functional replacement cost
Rebuilding with cheaper materials that do the same job; the HO-8 approach for older homes.
Card 15
Agreed value
On commercial property, suspends coinsurance for a stated period; it needs a statement of values.
Card 16
Coinsurance formula
(Did carry ÷ should carry) × loss − deductible, where should carry is the percentage times the value at the time of loss. Worked through on the coinsurance formula.
Card 17
Pro rata other insurance
Each policy pays in proportion to its limit. Near-twin: contribution by equal shares.
Card 18
Appraisal
Settles a dispute over the amount of a loss, never over whether it is covered. Near-twin: arbitration, used in the PAP for uninsured motorists disputes.
Card 19
Vacant
No occupants and no contents. Unoccupied means furnished but no one living there. Under the DP, vandalism coverage stops after more than 60 consecutive days vacant.
Card 20
Occurrence trigger
Covers injury or damage that happens during the policy period, whenever the claim arrives. See claims-made vs occurrence.
Card 21
Claims-made trigger
Covers a claim first made during the policy period for injury on or after the retroactive date.
Card 22
CGL Coverage B
Personal and advertising injury, triggered by an offense such as libel or false arrest. Near-twin: Coverage A, triggered by an occurrence.
Card 23
Hitting a deer
Other than collision under the PAP 2018, along with falling objects and glass breakage; glass broken in a collision may be treated as collision at the insured's option. See collision vs other than collision.
Card 24
Garagekeepers
Covers customers' autos in the insured's care. Near-twin: garage liability, which covers the business's own operations.
Card 25
Symbol 9
Non-owned autos on the Business Auto form CA 00 01, such as employees' cars used in your business. Near-twin: symbol 8, hired autos. All symbols: business auto symbols.
Card 26
Surety bond
Three parties: principal, obligee and surety. Near-twin: the fidelity bond, two parties. See surety vs fidelity bonds.
Card 27
General average
A voluntary sacrifice of ship or cargo shared by every interest on the voyage. Near-twin: particular average, a partial loss its owner bears.
Card 28
Instrumentalities of transportation
Bridges, tunnels, piers and pipelines. Inland marine under the Nationwide Marine Definition, never ocean marine.
Card 29
Monopolistic state
Workers compensation must come from the state fund: North Dakota, Ohio, Washington, Wyoming. Employers liability is bought separately as stop-gap coverage.
How to drill the deck
Name the twin first
Read the front, say the definition and the near-twin it gets confused with. A definition without the twin is only half the card: the twin is the term you have to tell it apart from.
Sort into two piles
Cards you got with the twin go aside. Cards you missed, or got without the twin, go back into the stack. Shuffle and run the misses again.
Test it in a stem
Once the stack is empty, take a set from the P&C practice test. When two options look alike, check whether one of them is a twin from this deck.
Where the cards come from
Every pair here comes from our content review of the exam's general block, which marked each one as a distractor family: hazards against perils, warranty against representation, occurrence against claims-made, the two bond types, the business auto symbols. Form figures name their edition (PAP 2018, CA 00 01), because insurers and states can modify forms and older editions carried different numbers.
The deck works best in short sessions between study blocks. The P&C study plan packs the coverage parts into 4, 8 or 12 weeks; a pass through this deck at the end of each week keeps earlier parts from fading while the plan moves on. For the longer explanation behind a card, open its study page, such as moral vs morale hazard or the business auto symbols.