Chapter 1-10 Definitions Flashcards
All textbook definitions
Ch 1. Class Rating
A rating approach that uses rates that reflect the average probability of loss for businesses within large groups of similar risks, the predominant method used for rating commercial properties.
Ch. 1 Schedule rating
A method of rating risks by measuring them against fixed standards of construction and protection. Risks below standards earn a charge that increases the rate, risks above earn a credit that reduces the rate.
Ch 1. Manuscript Wording
Policy wording that does not confirm to the standard wording in general use within the insurance industry and that is unique to the policy involved
Ch 1. Deductible
An agreed specified amount that the insured must pay on a claim before the insurance company will cover the rest of the claim. The amount is agreed upon by both the insurer and the insured. an insured’s obligation to pay a deductible is not based on whether the insured is at fault.
Ch 1. Self-Insured Retention (SIR)
A dollar amount specified in an insurance policy (usually a liability policy) that must be paid by the insured before the insurance policy will respond to a loss.
Ch 2. Loss run
A summary or report of loss experience for a risk over a specified period
Ch 2. Incurred loss ratio
The ratio of losses paid and reserved (that is, incurred) to premiums earned
Ch 2. Loss development factor
The markers or issues that will cause a change in the difference in the amount between the original estimate of the cost of a claim and the amount for which it is finally settled
Ch 2. Loss Triangle Method
The most widely used technique for projecting loss reserves. the method groups losses by year over successive time periods to demonstrate a history of change (or development) in the amounts of the losses. A loss triangle is created from multiple evaluations of the aggregate losses from a series of loss periods.
Ch 2. Accident year
Matching all losses, regardless of when they were actually reported, to the 12-month period in which they occured
Ch 2. Pure Premium
Portion of the total premium that is need to pay expected losses. It does not take into account money needed for company expenses.
Ch 2. Median accident date
The date in the middle of a series of dates of loss such that the number of dates of loss that precede the median date is the same as the number of dates of loss that follow it
Ch 3. Object
1) Electrical equipment used for the generation, transmission, or use of electrical power. 2) Boiler and pressure vessels and associated piping normally subject to internal pressure other than static pressure of contents. 3) Mechanical equipment used for the generation, transmission, or use of mechanical power
Ch 4. Drop Down Coverage
A clause in umbrella policies providing that the umbrella will “drop down” over reduced or exhausted underlying policy aggregate limits. some umbrella’s maintain their own coverage terms when they drop down, others assume those of the primary policy
Ch 4. Personal Injury Liability
Injury other than bodily injury arising out of defined cases that usually include false arrest or detention, malicious prosecution, wrongful entry, or eviction, libel or slander, or violation of a person’s right to privacy other than in the course of advertising, broadcasting, television or publishing
Ch 4. General Aggregate Limit
The maximum amount an insurer will pay for covered losses during a policy period
Ch 4. Incurred but not reported (IBNR) losses
An estimate of the amount of an insurer’s (or self-insurer’s) liability for claim-generating events that have taken place but have not yet been reported to the insurer or self-insurer. the sum of the IBNR losses plus incurred losses provide an estimate of the insurer’s eventual liabilities for losses during a given period
Ch 5. Cyber Risk
Any risk of financial loss disruption of business or damage to an organization’s reputation due to a failure of its information technology systems
Ch 5. Sharing Economy
A collaborative system where participants share access to services and products rather than owning them individually generally facilitated through an online platform.
Ch 5. Ridesharing
An arrangement set up by means of a website or mobile app in which a passenger travels in a private vehicle driven by its owner, for free or for a fee.
Ch 5. Carsharing
An arrangement set up by means of a website or mobile app that links renters and car owners. Sometimes called vehicle sharing or peer to peer car rental services
Ch 5. Transportation network
An online-enabled application or website used by persons to prearrange the transportation of passengers for compensation by a transportation network drive. Also called ridesharing services.
Ch 5. Accommodation Sharing
An arrangement set up by means of a website or mobile app in which a property primarily occupied by its owner is rented for a short time period to a third party.
Ch 5. Accommodation Sharing
An arrangement set up by means of a website or mobile app in which a property primarily occupied by its owner is rented for a short time period to a third party.
