DEFINITIONS/terms/wrong q's Flashcards
Risk
Chance of loss
Peril
An event that MAY cause a loss to occur
Proximate cause
The immediate and effective cause the loss
Indemnity
To put you back in the same financial position just prior to loss , no better, no worse , no profit
Property and casualty (P&C)
AKA General insurance Everything other than life and health
Negligence
What a reasonable + prudent person would/wouldn’t do in same situation
1st party/ 2nd party to contract
- 1st party = insured
- 2nd party = insurer
Lloyd’s of London
It’s a market!!
NOT insurance
Estoppel
Cannot deny what you’ve already said
Reinsurance
Insurance for insurance companies
Frequency
- based on % of biz
- based on % of loss (?)
Severity
Dollar amount of loss
Legal entity
Someone who can sue or be sued
I.e a business w/ a trade name (not a legal entity, can’t be sued)
I.e : Mikes repair shop: trade name, can’t sue) Mike smith: legal entity, CAN sue Legal entities: - Ltd - limited - inc -incorporated
Actual cash value (ACV)
Today’s price - depreciation
OR
Replacement cost - depreciation
Replacement cost
Today’s price W/O deducting depreciation