Chapter 8: Key Terms Flashcards
Actual Cash Value
The depreciated value of personal property
Assumption of Risk
The injured party fully understood and recognized the dangers that were involved in an activity and voluntarily chose to proceed
Basic Coverage
Protects the homeowner from losses associated with specifically named perils
Bodily Injury
Occurs when an insured driver causes bodily harm to a third party and the insured driver is deemed responsible for the injuries
Broad Coverage
Provides protection for the perils covered in basic coverage, plus additional protection for named perils not covered under basic coverage
Collateral Source Rule
Holds that damages assessed against a negligent party should be reduced simply because the injured party has other sources of recovery available, such as insurance or employee benefits (health or disability insurance)
Collision
Auto insurance coverage that protects the insured against upset and collision damages, such as those sustained in an accident involving other vehicles, or those sustained when an auto runs off the road.
Combined Single Limit Policy
A policy that has a fixed amount of coverage that the insurance company pays, whether the loss is attributable to bodily injury or property damage
Comparative Negligence
The amount of damage is adjusted to reflect the injured party’s proportion of contribution to the cause of the injury
Comprehensive
Auto insurance coverage that protects the insured’s auto against perils out of the insured’s control, such as missiles or falling objects, fire, theft, earthquake, hail, flood, or vandalism
Contributory Negligence
Negligence on the part of the injured party that contributes to the harm and therefore requires the injured to bear some responsibility for the injury
Dwelling
Residential structure covered under a homeowners insurance policy
Endorsement
Attachment or addition to an existing insurance policy that changes the original terms
Homeowners Insurance
A package insurance policy that provides both property and liability coverage for the insured’s dwelling, other structures, personal property, and loss of use
Intentional Interference
Intentional act committed against another that causes injury
Last Clear Chance Rule
This rule states that a claimant who is endangered by his own negligence may recover if the defendant has a “last clear chance” to avoid the accident and failed to do so
Liability Coverage
Covers bodily injury or property damage to others for which the insured driver is deemed to be responsible
Libel
A written statement that causes harm to another
Loss of Use
Under homeowners insurance coverage, loss of use is a combination of additional living expenses and loss of rental income
Medical Payments
A no-fault, first-party insurance coverage designed to pay for bodily injuries sustained in an auto accident
Negligence
Harm caused by failure to use reasonable care
Open Perils Policy
All-risk coverage for personal property that provides for a much broader and more comprehensive protection program than named-perils coverage
Other Structures
Small detached structures on the insured;s property in addition to the main house, such as garages, greenhouses, or storage buildings
Personal Automobile Policy
Insurance policy that covers liability for injuries and damages to persons inside and outside the vehicle and covers the cost to repair/replace a damaged or stolen vehicle
Personal Liability Umbrella Policy (PLUP)
Coverage designed to provide a catastrophic layer of liability coverage on top of the individual’s homeowners and automobile insurance policies
Personal Property
Valuable items owned by the insured that are covered under homeowners insurance
Replacement Cost
The amount necessary to purchase, repair, or replace the dwelling with materials of the same or similar quality at current prices
Res Ispa Loquitue
A doctrine of the law of negligence that is concerned with the circumstances and the types of accidents, which affords reasonable evidence if a specific explanation of negligence is not available
Slander
Verbal statement that causes harm to another
Split Limit Policy
Three separate liability coverage limits covering bodily injury (per person and per occurrence) and property damage
Strict and Absolute Liability
Liability resulting from law. Strict liability allows for defense, absolute liability does not
Uninsured / Underinsured Motorist
Motorist without liability coverage or whose insurer can/will not pay claim, such as a hit-and-run driver, or motorist with insufficient liability coverage according to state law
Vicarious Liability
One person may become legally liable for the wrongful act of another
