Chapter 2. Policy Provisions and Contract Law Flashcards
Earned premium
The portion of premium paid that now belongs to the insurer because it applies to the lapsed part of the policy
What are the four required elements of an insurance contract?
- Agreement
- Consideration
- Competent parties
- Legal purpose
What are the four (of seven) major components of a property or liability policy?
DICE
- Declarations
- Insurance agreement
- Conditions
- Exclusions
Who is the first named insured?
The person whose name appears first in the policy Declarations
This is the primary contact for the insurer and the person responsible for paying premiums
Who are additional insureds?
Persons covered by the policy who are not named in the policy Declarations
What is a binder?
A temporary agreement issued by an agent or insurer providing temporary coverage until a policy can be issued
What federal organization produces standardized insurance forms adopted by states?
ISO - Insurance Standards Office
What is another name for the Declarations page?
The Dec page or the Dec sheet
What is liberalization
It extends broader coverage to current policies without increasing premiums
What is another name for the policyowner of commercial property policies?
The first named insured
In P&C insurance, what is required for assignment to be valid?
Written consent of the insurer
What insurance principle does pro rata liability protect?
Indemnity
When does pro rata liability apply?
When an insured has more than one policy covering a loss
What is additional coverage in P&C insurance?
A provision that adds more coverage for a specific loss at no additional premium
