Tennessee Property and Casualty Insurance Laws Flashcard

Front

What is the maximum value for which fire insurance policies can be issued in Tennessee?

Back

The fair value of the property

Answer explanation

In Tennessee, fire insurance policies can be issued for the fair value of the property, which reflects its actual worth rather than market fluctuations or agreed values. This ensures adequate coverage for the insured.

Front

Within how many days must an insurer inspect a property after issuing a fire policy?

Back

90 days

Answer explanation

An insurer must inspect a property within 90 days after issuing a fire policy. This timeframe ensures that the insurer can assess the risk and condition of the property effectively.

Front

If a building is totally destroyed by fire, what does the insurer pay?

Back

The actual cash value, not exceeding the policy amount

Answer explanation

The insurer pays the actual cash value, which accounts for depreciation, not exceeding the policy amount. This means the payout reflects the building's value at the time of loss, ensuring fair compensation.

Front

How much notice must insurers give before nonrenewing personal risk policies?

Back

30 days

Answer explanation

Insurers must provide a 30-day notice before nonrenewing personal risk policies. This requirement ensures policyholders have adequate time to seek alternative coverage.

Front

What must insurers ensure about the rates they charge for personal risk insurance?

Back

They are not excessive, inadequate, or unfairly discriminatory

Answer explanation

Insurers must ensure that rates for personal risk insurance are not excessive, inadequate, or unfairly discriminatory to promote fairness and financial stability in the insurance market.

Front

What must insurers offer in auto policies unless the insured rejects it in writing?

Back

Uninsured motorist coverage

Answer explanation

Insurers must offer uninsured motorist coverage in auto policies to protect against accidents with drivers who lack insurance. This coverage is mandatory unless the insured explicitly rejects it in writing.

Front

What is an example of commercial risk insurance?

Back

A restaurant’s liability policy

Answer explanation

A restaurant’s liability policy is a type of commercial risk insurance that protects businesses from claims related to injuries or damages occurring on their premises, unlike personal insurances like auto or health.

Front

After how many days in force can a commercial policy be canceled only for specific reasons?

Back

60 days

Answer explanation

A commercial policy can be canceled only for specific reasons after 60 days in force. This is a standard regulation that protects both the insurer and the insured during the initial period.

Front

How much notice must insurers give before nonrenewing a commercial policy?

Back

60 days

Answer explanation

Insurers must provide 60 days' notice before nonrenewing a commercial policy. This requirement ensures that policyholders have adequate time to seek alternative coverage.

Front

What must insurers do if commercial rates increase by more than 25%?

Back

Provide 60 days’ notice to both the insured and agent

Answer explanation

Insurers must provide 60 days’ notice to both the insured and agent if commercial rates increase by more than 25%. This ensures all parties are adequately informed before the rate change takes effect.