Definitions Flashcards
Define property Insurance
First party insurance that indemnifies the owner or user of property for its loss, or the loss of its income producing ability, when the loss or damage is caused by a covered peril, such as fire or explosion.
Insurable interest
An interest that the insured must have in the subject matter of the insurance purchased so that if the event insured against occurs the insured will suffer an economic loss
Indemnity
A contract, expressed or implied, to repay the event of a loss. The insured neither gains nor loses.
Contract
An agreement I promise between two or more parties that is intended to be legally enforced and is constituted by the acceptance by one party of an offer made by another party, to do or to abstain from doing a specific act. The offer acceptance may either be expressed or be inferred through the conduct of the parties.
Contract (Quebec)
An agreement of whales by which one or several persons obligate themselves to one or several other persons to perform a pre-station (that is, a duty, a payment of money, or a service)
Uberrimae fidei
Of the Utmost good faith. The basis of all insurance and reinsurance contracts. Both parties to the contract are bound to exercise good faith and do so by a full disclosure of all information material to proposed contract.
Peril
The event that caused a loss covered by the policy for example fire, windstorm.
Deductible
And agreed specified amount that the insured must pay on a claim before the insurance company will cover the rest of the claim. This amount is greed upon by both the insurer and the insured. And Insurance obligation to pay a deductible is not based on whether the insured is at fault.
Fire insurance
Coverage for losses from fire, lightning, and limited explosion and also the resultant Damage caused by smoking water. Usually supplemented by extended coverage insurance
Exclusion
Risks, perils, or properties defined in the policy as not covered
Flashpoint
The lowest temperature at which a liquid gives off sufficient vapours to form an ignitable mixture with air
Statutory conditions
Special prescribed and standardized conditions that the provincial and territorial insurance acts required to be included in insurance policies
Extended coverage insurance
An endorsement that enlarges the coverage afforded by the primary policy. Coverages such as windstorm, hail, smoke, and riot are extended coverage is on a fire policy
Mortgage clause
A clause in an insurance policy that stipulates the rights and obligations of the insurer and the mortgagee
First party insurance
Protects the named insured and others with an insurable interest in or mortgage on the property or who entrust their property to the insured against loss or damage to the insured property
Third party insurance
Liability insurance is purchased by the insured (the first party) from an insurer (the second party) to compensate or indemnify another (the third party) for damage or loss for which the insured is lawfully liable
Direct loss or damage
Damage to property by direct action of a peril insured against, as distinguished from contingent or indirect damage
Plain language policy
Policies written in every day language so that they are easily understood. Technical terms with their technical meanings are used only where are required by law or one substitutions would be misleading
Warranty
Statement or stipulation or promise in an insurance contract, the breach of which may nullify the contract
Proximate cause
Because that, in a natural and continuous sequence unbroken by any new an independent clause, produces an event and without which the event would not have happened
Current causation
A doctrine that holds that is a lost to property is a tributable to more than one cause, any one of which is covered by the insurance policy, the loss is payable under the policy
Actual cash value
The fair market value of property, taking into account factors that might argument or reduce the value of the property in question. Actual cash value is usually calculated in one of three ways
1.Cost to repair or place less depreciation
2. Fair market value or
3. consideration of all relevant evidence of the value of the damage to property.
Replacement insurance
Insurance coverage that indemnifies for loss or damage to insured property at the current market price rather than the depreciated value. Thus, the Radion premium are based on the current cost to replace the insured property
Declaration
Statements included in a policy that are agreed To by the insured and form the basis of the contract of insurance
Package policy
Any insurance policy that covers two or more lines or types of insurance in the same policy
Adverse selection
Occurs when those with higher risks may purchase insurance in greater amounts than those with the lower risks. Much of insurance law and practice is designed to control adverse selection. Insurers protect themselves from adverse selection by attempting to measure risk and either charging more for the high-risk or refusing to cover them at all.
Subscription policy
A single policy covering a risk that is divided among a number of insurers. The policy is issued by the lead company (usually the one with the largest percentage) and signed by all participating companies.
Multi-limit policy
A type of habitation policy were separate insurance amounts are shown for the building and for the personal property
Single limit
A type of habitation of policy where one insurance amount as shown encompassing the building and personal property
Loss payee
A person or an entity other than the named insured to whom the proceeds of insurance will be paid
Chattel
Any property other than freehold land and leasehold interest in land
Guaranteed replacement cost
An undertaking by the insurer to pay the cost of repairs to replace the dwelling building even if it is more than the amount of insurance on the dwelling building, provided certain conditions are met in addition to those that normally govern settlement at replacement cost. Called enhanced replacement cost in Quebec
Seepage
 A slow flow of water that takes place over a more extended period of time then accidental discharge, usually through porous materials
Endorsement
An amendment added to a written document, particularly an agreement between parties, altering its provisions
Manuscript wordings
Policy wording that does not conform to the standard wording in general used within the insurance industry and that is unique to the policy involved
Floater policy
Additional coverage for the moveable items, like jewellery or antiques, beyond what’s included in the basic homeowners policy. Also called a writer or endorsement. A policy designed to cover property that floats or moves from location to location
Schedule of insurance
A list of items individually covered by a policy for example a list of Jules under a jewellery floater or a list of cars under one automobile policy or a list of buildings under a fire fire policy
Personal article floater
A policy that covers certain kinds of personal property that a principal residence more broadly or for higher limit then do policies such as a homeowners policy of more general scope. A property appraisals often required
Marine survey
Appraisal of a boat for value, mechanical condition, safety, and evidence of damage
Mobile home
Manufactured housing, commonly called house trailers, usually placed in one location and left there permanently, but retaining the ability to be moved, as required in many areas. Behind the cosmetic work fitted at installation to hide the base there are strong trailer frames, axles, wheels, and tow hitches
Modular homes
A type of manufactured housing that is built in a factory and move to a building site in large individual sessions it is not moveable and may be considered a permanent structure
Condominium
Individual ownership of a single unit in a multiunit building or group of buildings including a percentage interest in the part of the total property of owned jointly by all unit owners. Condominium property requires special insurance treatment
Inherent vice
Equality within an object that makes it 10 to destroy itself
Replacement cost value (RCV)
The current market value of the cost to replace the loss or damage insured property
Coinsurance clause
A distinct section or provision in an insurance policy that requires an insured to carry separate insurance for a specified Amount stated in the policy to be eligible for full coverage. If there is insufficient coverage the insured must Pay part of the loss
Statement of values
The information required when a single read is to cover more than one item or building. To determine the correct average, the rating bureau Requires the policyholder to give the value of each separate risk and its contents
Underwriter
The insurance company or group that under rates or ensures a particular risk
The individual within an insurance company whose responsibility it is to Except or reject business in the particular line in which she specializes and this way choose the risks her principles are prepared to underwrite
Line guide
A listing of the maximum amount of exposure and insurance company is prepared to except on various classes of risks
Frequency loss
This is a measure of how often losses are likely to occur in the future. Assuming the average size of loss is constant The higher the Lost Frequencies the worst the loss experience
See verity of loss
This is the average size of the losses. The larger the average loss, the higher the loss severity is said to be. And assuming the loss frequency is constant, the higher the loss severity, the worse the loss experience
Rate
Amount charged to an insured that reflects the expectation of loss for a covered risk, insurance company expenses, and profit. In other words it is the basis of premium calculated for the insurance provided for the exposure
Actuary
One who specializes in mathematics of insurance, mortality rates, and the lake
Rate making
The process of compiling an analyzing data to establish rates that accurately Reflect the level of risk. Usually performed by actuaries
Rating
The process by which underwriters apply the rates developed by actuaries to the information that underwriters have gathered to determine premium for individual risks
Premium
The price of insurance protection for a specified risk for a specified period of time
Adjuster
One who investigates insurance claims, making recommendations regarding the payment of benefits from insurance policies, and negotiates payments and settlements
Common law
A system of laws originating and developed In England by judges based on court decisions and similar tribunals. Also known as caselaw or the law of precedent
Civil code of Quebec
The civil code in force in the province of Quebec
Precedent
A legal decision that serves as a basis to
Case law
The body of previously decided cases that courts review for guidance on cases currently in dispute
Statue law
A law set down in a government act and passed by legislature
Contra Proferentem
A legal term that provides that any ambiguity in a contract must be interpreted against the person who drew the contract because the person had the opportunity to make it clear
Material fact
A fact that would affect the contract of insurance enough to influence and ensures decision regarding whether to accept or reject the risk Or the premium to be sad. Material facts must be disclosed by the applicant if asked about
Ab initio
A Latin term meaning to go back to the beginning. When a policy is rejected or made void ab initio, Premium is refunded entirely and the contract is treated as though it never existed
Privity of contract
Relationship that exist between two parties or more by virtue of their having entered into a contract
Short term cancellation
The cancellation by the insured of a policy before its natural expiration. The insured pays a return premium that is less than the proportionate part that remains unearned
Minimum retained premium
A premium specified on an individual policy that is the minimum amount retained by the insurer in the event that the policy is cancelled mid term by the insured
Proof of loss
A formal statement of facts about a loss attested to buy the claimant, in a form specified by the insurer. A proof of loss may need to be notarized. An insurer must respond to a proof of loss after a specified time period with a formal disposition of the claim - approved or denied
Subrogation
Legal process by which an insurance company, after the payment of loss, is assigned the rights to the insured to recover the amount of the loss from those who are legally liable for it
Personal information protection and electronic documents act (PIPEDA)
A federal statute that governs the collection and use of personal information. It states that personal information should be collected must be relevant and that all information that has been collected is being collected or will Be collected must be held in the strictest of confidence
Risk
The chance of loss. Specifically the possible loss or destruction of property or the possible incurring of a liability. Sometimes referred to as the subject of an insurance contract
Named perils policy
A policy in which the perils insured against are listed as opposed to one that ensures against all risks
All risks policy
A name given to an insurance policy that covers each and every loss except for those that are specifically excluded if the insured does not Excluded then it automatically covered this is the brightest type of policy that can be purchased
Specified perils
Perils insured against that are specifically named in a policy. Losses resulting from the perils listed are covered under the policy. This is the flipside of all risk coverage where losses resulting from the perils listed are excluded
Fire
Combustion manifested in light flame and heat for useful purposes such as friendly fire or destructive purposes such as hostile fire
Personal property
Legally any property of an insured other than real property. More often used to refer to the personal property a family members insured under a homeowners policy
Real property
Land in any property that is tangible and usually fixed or attached to the land
Theft
The wrongful taking of the property of another it is a broad term and includes larceny, pilfering, holdup, robbery and pickpocketing 
Earth movement
A general term that Includes earthquake landslide snowslide and volcanic irruption among other phenomena
Fluvial flooding
The overflow of a river
Pluvial flooding
Flooding caused by rain
Hazard
- A risk or probability that the event insured against might occur
- A condition that engenders or increases the chance of a loss
Physical hazard
A hazard arising from the physical conditions or characteristics of the object that is insured
Moral hazard
A hazard arising from the character interest habits and lack of integrity of the insured or persons concerned
Conflagration
- A fire involving two or more risks or extended over wide areas
- Any unusual large fire
Sublimit
A limitation an insurance policy on the amount of coverage available to cover a specific type of loss
