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
Tort
You have been legally wronged Right to sue them (negligence)
Material fact (pertaining to underwriter)
- Anything about risk (chance of loss) underwriter needs to know to accept/reject risk + terms and conditions to be added to policy of accepted
Misrepresentation
- Non disclosure /concealment
- Silence when obligation to speak
Voidable (void)
- contract never existed
- any premium rec’d , must be returned
Damages
Monetary compensation to plaintiff for bodily injury/ property damage )
Waiver (of premium?)
Relinquishment of a known right
Hazard
A condition that MAY cause a peril to occur OR may make loss more severe
Common law contracts 5 elements
(A Cool Cat Gets Lucky)
-
Agreement
- offer and acceptance
- even if not signed
-
Consideration
- price to be paid
- Definition: Payment or promise to pay (monthly) OR An exchg of something of value (even if NOT cash)
- Legality of object/Purpose: Can’t be against public policy
- Legal capacity (+ legal entity):
- Minors: can enter contract, but can walk away
-
Genuine Intention
- both wanted to enter contract, not forced
Insurane contract 3 additional elements
(In It’s Underwear)
- Insurable interest
- Indemnity (salvage, contribution, subrogation)- SCS
- Utmost Goodfaith
Basic fire policy- 3 perils
- Fire
- Lightning
- Explosion
SALVAGE
- slavage is the leftover
- Disposition negotiated between insurer and insured
CONTRIBUTION
- the sharing of loss/liability btwn 2 or more isurane co’s
- Insurance under more than 1 policyt
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SUBROGATION
- insurer will bring action in YOUR Name to enforce your rights or assume liability
- putting yourself in someone else’s shoes
Vandalism
damage to property without regard to ownership
malicious acts
damage to property DUE TO ownership (don’t like the owner)
Manuscript wording
one of a kind wording
desihgned for a particular risk (i.e CN Tower)
Subscription policy
2 or more ins co’s subscribing to policy
more than 2 insurance co participates in the policy prepared by the lead company
other companies take piece of the action to make a full 100%
PREMIUM
Money required to pay losses that occur
Key page numbers
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