04. Important Terms

Question 1

First Name Insured

Answer 1

The first person or organization listed on the declarations page ( the only person allowed to make changes to the policy )

Question 2

Policy Period

Answer 2

The dates during which the policy is in effect

Question 3

Binder

Answer 3

• Temporary coverage for an insurance applicant until the policy is issued
• gives the insurer time to underwrite policies thoroughly
• provides needed coverage to applicants in the meantime

Question 4

Blanket Coverage ( or blanket limit or blanket insurance )

Answer 4

“Blankets” more than one property, type of property, or coverage under a single limit

Question 5

Specific Limits

Answer 5

Limits that apply to one specific type of property

Question 6

Representation

Answer 6

A statement of fact

Question 7

Misrepresentation

Answer 7

A false, distorted, or deceitful statement of fact or opinion, even if made unintentionally

Question 8

Warranty

Answer 8

• Promise or guarantee that certain conditions will be met
• warranties are found on the conditions page
• if a policyholder breaks a warranty, the insurer can deny coverage

Question 9

Concealment

Answer 9

Deliberately withholding relevant information

concealment = hiding the truth, misrepresentation = stating something untrue

Question 10

Waiver

Answer 10

Voluntary surrender of a right, claim, or privilege

• can be expressed or implied
• express waiver: In writing, signed
• implied waiver: assumed based on actions

Question 11

Estoppel

Answer 11

Legal principle that prevents an insurer from denying coverage of the insured if the policyholder has been led to believe in good faith that coverage applies.

• form of implied waiver