1/F - Important Terms Flashcards
Simple Insurance Terms
Insurer: the company or organization offering financial protection
Insured: the person or organization that is covered by the policy; usually the one who owns the policy and pays the premiums
First Named Insured: the first person or organization listed on the declarations page
Policy Period
The dates during which the policy is in effect
- Runs from the inception date to the expiration date
- Usually ends at 12:01 AM on the expiration date
Binder
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
Blanket Coverage vs. Specific Insurance
Blanket Coverage: “blankets” more than one property, type of property, or coverage under a single limit
Specific limits: limits that apply to one specific type of property
Representation/Misrepresentation
Representation: a statement of fact
Misrepresentation: a false, distorted, or deceitful statement of fact or opinion, even if made unintentionally
Warranty
Promise or guarantee that certain condition will be met
- Warranties are found on the conditions page.
- If a policyholder breaks a warranty, the insurer can deny coverage
Concealment
Deliberately withholding relevant information
Concealment vs. Misrepresentation:
- Concealment is hiding the truth
- Misrepresentation is stating something untrue
Waiver
Voluntary surrender of a right, claim, or privilege
- Waivers can be “express” or “implied”
- Express waiver: in writing, signed
- Implied waiver: assumed based on actions
Estoppel
Legal principle that prevents an insurer from denying coverage if the insured has reasonably come to believe that he has such coverage, based on the insurer’s practices
Estoppel is a form of implied waiver. The insurer loses its right to refuse coverage, if:
- It has previously allowed an action without restriction
- It has made misleading statements or practices that the insured has come to believe
