Chapter 2 [Property Insurance Terms] Flashcards
The insured may not transfer rights of ownership without the insurer’s prior written consent
Assignment
The obligations of the insured that must be met following a loss before the insurer will settle the loss
Duties in the Event of a Loss
Dispute resolution method used when the insured and insurer cannot agree on the amount of the loss
Appraisal
The period of time for which coverage applies
Policy Period
The maximum amount the insurer will pay for a covered loss
Limit of Liability
A sudden, unforeseen, unintended, and, unplanned event from which loss or damage results.
Accident
An accident that includes continuous or repeated exposure to the same general harmful conditions.
Occurrence
The termination of an insurance policy before its expiration date.
Cancellation
A proportionate cancellation of insurance that refunds premium to the insured based on the precise number of days coverage was in effect.
Pro Rata Cancellation
A cancellation of insurance that incurs a financial penalty.
Short Rate Cancellation
A cancellation of insurance that is retroactive to the effective date of the policy.
Flat Cancellation
The termination of a policy at the expiration of its term.
Non Renewal
The primary cause of loss.( First event in the unbroken chain of events that resulted in loss.)
Proximate Cause
A fire that was intentionally set and stays within its intended boundaries
Friendly Fire
A fire that burns outside its intended boundaries, or becomes uncontrollable.
Hostile Fire
A quality within a property that causes it to damage or destroy itself (Rust, rot, fading of paint)
Inherent Vice
A legal agreement issued by an insurance company or a producer that provides temporary proof of insurance until the insurer is able to issue an insurance policy.
Binder
What is the maximum amount of days a binder can be issued for
60 Days
Process whereby a disputed claim is decided by a neutral party.
Arbitration
Right of the insurer to take possession of damaged property after paying for its loss.
Right of Salvage
The amount for which property can be sold at the end of its useful life.
Salvage Value
What is the salvage value in in property insurance
The scrap value of damaged property.
A policy form that alters or adds to the provisions of a property and casualty insurance contract.
Endorsement
Concurrent Causation
A principle holding that when two perils simultaneously cause a loss
In the event of concurrent causation what must the insurer do, even if one peril is excluded in the policy?
The insure must pay the loss
Concurrent Policies
The existence of two or more policies covering the same exposures, having the same policy periods, and the same coverage triggers.
What happens with concurrent policies in the event of a loss?
Each policy will pay its pro-rate share of the loss.
