Chapter 1 Flashcards
Insurable interest
An interest in the subject of an insurance policy that is not unduly remote and that would cause the interested party to suffer financial loss if an insured event occurred.
Contract of indemnity
A contract in which the insurer agrees, in the event of a covered loss, to pay an amount directly related to the amount of the loss.
Joint owners/tenants
Two or more persons each having a full interest in the property. Each tenant has an insurable interest to the full extent of the property value.
Tendency by the entirety
A joint tenancy between husband and wife.
Tenancy in common
A concurrent ownership of property, in equal or unequal shares, by two or more joint tenants who lack survivorship rights.
Life tenant (life estate)
A person entitled to exclusive possession of real property and to all income philander produces for the duration of that person’s or someone else’s life; terminates on the death of the life tenant and does not pass to his or her estate.
Sole proprietorship
A form of business in which one person owns the business assets and is personally liable for the business’s debts.
Partnership
A for-profit business entity jointly owned by two or more persons who share ownership and profits (or losses), although not necessarily on an equal basis.
Corporate veil
A doctor and that insulates the assets of the owners of the corporation in case the corporation goes bankrupt. The corporations owners, the stockholders, are not personally liable for the corporation’s debts.
Limited liability company
A form of business entity that provides its owners with the limited liability of a Corporation and the tax advantages of a partnership.
Tenant (LESSEE)
Someone who pays to use, possess, or occupy property belonging to another.
Bailee
The party temporarily possessing the personal property in a bailment.
Consignee
The person or organization that receives property being transported by a carrier.
Common carriers
Airlines, railroads, or trucking companies that furnish transportation to any member of the public seeking their offered services.
Guardian
A person appointed by a probate court to safeguard and distribute the estate assets for a minor’s or incompetent’s benefit.
Trustee
Someone who has the legal title to a property but is responsible that it be used, handled, and transferred solely for the benefit of the beneficiary.
Security interest
An interest in property real or personal that allows the property to be sold on default to satisfy the debt for which the security interest was given.
Mortgage
An interest in land created by a written document that provide security for the payment of a debt.
Mortgagee
A lender in a mortgage arrangement, such as a bank or another financing institution.
Loss payee
A party entitled to share in whatever loss payment and insured receives.
Lien
A creditor’s legal right or interest in another’s property, usually lasting until satisfaction of the specific debt or duty that the lien secures.
Mechanic’s lien
A lien, granted by law to anyone who repairs a specific piece of property, that secures payment for the repairs.
Tax lien
A type of lien held by local, state, and federal governments through operation of law in the amount of unpaid taxes and interest.
Judgment lien
A lien, in favor of the holder of a judgment, that attaches to the property of the one who owes the judgment.
Purchase money security interest
A type of security interest that gives the holder priority in foreclosure over subsequent lien holders or general creditors.
Assignee
The individual or entity to whom properties, rights, or interests have been transferred.
Real property
Tangible property consisting of land, all structures permanently attached to the land, and whatever is growing on the land.
Personal property
All tangible or intangible property that is not real property.
Coinsurance
An insurance-to-value provision in many property insurance policies providing that if the property is underinsured, the amount that an insurer will pay for a covered loss is reduced.
Fixture
Any personal property affixed to real property in such a way as to become part of the real property.
Trade fixtures
Fixtures and equipment that may be attached to a building during a tenant’s occupancy, with the intention that they be removed when the tenant leaves.
Improvements and betterments
Alterations or additions made to the building at the expense of an insured who does not own the building and who cannot legally remove them.
Direct physical loss
A loss that is physical (not just financial) and results immediately from the occurrence.
Burden of proof
In a trial, the duty of a party to prove that the fax it claims are true.
Fire
The rapid oxidation of combustible material, releasing heat and flame. Without flame there is no fire, for insurance purposes.
Friendly fire
A fire that stays in its intended place, such as a fire in a fireplace.
Hostile fire
A fire that leaves its intended place, such as a spark that escapes a fireplace and sets the carpet on fire.
Vandalism
Willful and malicious damage to or destruction of property.
Collapse
An abrupt falling down or caving in of a building with the result that the building or any part of the building cannot be occupied for its intended use.
Moral hazard
A condition that increases the likelihood that a person will intentionally cause or exaggerate a loss.
Morale hazard
A condition of carelessness or indifference that increases the frequency or severity of loss.
Concurrent causation (concurrent causation doctrine)
A legal doctrine stating that if a loss can be attributed to two or more independent and current causes–one or more excluded by the policy and one covered–then the policy covers the loss.