Property & Casualty 40-Hour Prelicensing Course

The objectives of this course is to expose you to a variety of contemporary insurance issues. In addition to laying a foundation of knowledge, it is hoped that these topics will stimulate your curiosity to learn more about one or several of the subjects discussed. This is a self-study course designed to help you meet your prelicensing requirement. It has been accredited by the State. For best results, you should review the complete text. To measure your knowledge, you must pass the online examinations associated with this course. For details on the examination and procedures for earning a Certificate of Completion and credit hours, go to www.preclass.com This publication is designed to provide authoritative information in regard to the subject matter covered. It is sold with the understanding that the author is not engaged in rendering legal, accounting or other professional services. The information within these pages is general insurance education. It is not to be used to advise your clients or others in specific matters unless we agree in writing, in advance, that it will be used for that purpose. If you need advice for specific client matters, seek a competent professional. For more course offerings call (800) 498-5100 or go to: www.AffordableEducators.com Affordable Educators.Com 41890 Enterprise Cir So #100 Temecula, Ca 92590 CONTENTS 1 – Introduction 2 – Nuts & Bolts of A Policy 3 – Contract Law 4 – Personal Lines 5 – Inland Marine 6 – Other Property Products 7 – Personal Auto 8 – Commercial Coverages 9 – Commercial General Liability & Professional Liability 10 – Bonding & Crime 11 – Commercial Auto 12 – Workers’ Compensation & Employer Liability 13 – Homeowners Insurance Valuation 14 – Replacement Cost Coverage 15 – Construction and Values 16 – Catastrophe Coverage 375 17 – Insurance Terms & Concepts 18 – Licensing 19 – Code & Ethics 20 – The Commissioner & Insurers 21 – Marketing & Trade Practices 22 – California Insurance Guarantee Fund Section PC 1 INTRODUCTION TO PROPERTY & CASUALTY Objectives This unit will familiarize you with some of the basic and/or reoccurring terms and themes in insurance. That way, as you’re reading through later units, you’ll hardly ever bump into a concept you don’t know. This unit can also be used as an addendum to the glossary. This unit includes . . . • • • • • Introduction to Insurance General Insurance Concepts Methods of Handling Risk Ideally Insurable Risks Determining Loss/Loss Valuation SPECIAL NOTE: Until 2011, agents who sold homeowners, auto, commercial, professional liability, workers compensation, flood, earthquake or personal property insurance did so under one license . . . called a Fire and Casualty License. Today, an agent selling these products is required to have two licenses . . . A Property Broker-Agent License and a Casualty Broker-Agent License. This course prepares you for BOTH licenses. Similarly, our property-casualty workbook materials (provided under separate cover), that prepare you for the State Exam, cover BOTH Property and Casualty topics. It is also of interest that Property and Casualty Broker-Agents today are NOT permitted to sell health, disability and long term care insurance products; products previously sold under the defunct Fire and Casualty License. The sale of these health insurance products today requires a separate Accident and Health License . . . a course available from our school. 1. Introduction to Insurance Insurance is a contract that indemnifies (repays) someone against loss, damage, or liability. An insurance policy is a written contract that outlines the obligations and responsibilities of the insured and the insurer. Insurance refers to transferring the risk of a loss to an insurer under the terms and conditions of an insurance contract. The insurer will indemnify the insured against loss, damage, or liability arising from a contingent or unknown event. Among the different types of loss/risk control, insurance is known as the transfer of risk, or risk transference. If someone chooses not to insure their valuables, then they are assuming the risk of loss. Putting it into Context: Here’s an example of how this benefits society. Say neighborhood X experiences an average of 1 devastating house fire annually. Without insurance, the owner of the house will have to pay hundreds of thousands of dollars. Instead, everyone in neighborhood X pays $500 in HO insurance, and in exchange they can rest assured that if their home burns down, they will be fully compensated. Related Lingo: The Insured is the person protected under the Insurance policy. The Insurer is the company or the individual who provides the policy. The Named Insured is the person/persons specifically listed in the policy as the insureds. Insured premises means a location where coverage applies. Insured residence means the insured lives where coverage applies. Note: Insured is more of a general label for an insurance client. For example, “The Personal Auto Policy protects the insured against damage or injuries from uninsured/underinsured motorists. Whereas, Named Insured refers to a specific person, family, or group listed in the policy. For example, “The Jones’s are the named insured in the Personal Auto Policy declarations. A.