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Fundamentals of Insurance Level One > Glossary of Insurance Terms > Flashcards

Glossary of Insurance Terms Flashcards

1
Q

Agent

A

In insurance: a person authorized to represent insurer in dealing with third parties in matters relating to insurance.

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2
Q

Bailee for Hire

A

One who has temporary possession of personal property for others for a purpose other than sale, and who is compensated for caring for it.

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3
Q

Binder

A

A written or oral agreement from the insurer giving temporary protection to insured, pending issue of the policy.

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4
Q

Bodily Injury

A

Generally defined in liability policies to mean bodily injury, sickness, or disease sustained by a person, including death resulting from any of these, at any time.

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5
Q

Broker

A

An independent middleman, not tied to a particular company, who obtains insurance for his clients from insurance companies or their agents.

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6
Q

Burglary

A

In insurance policies: the unlawful taking of property from within the premises by a person unlawfully entering or leaving the premises, as evidenced by marks of forcible entry or exit.

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7
Q

Commission

A

Sum paid as remuneration to the broker for business placed with an insurer.

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8
Q

Condition

A

A condition imposed upon insureds under the policy requires them to do or not to do something during the term of the policy.

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9
Q

Condominium

A

A system of separate ownership of individual untils, in a multiple unit building.

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10
Q

Consideration

A

In a contract, an exchange of something of value between the parties.

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11
Q

Contract

A

An agreement between two or more parties which is enforceable by law.

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12
Q

Damages

A

The specific dollar amount or percentage of the insured value to be borne by the insured before they are entitled to recover from the insurer.

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13
Q

Disability

A

When used in Accident and Sickness Insurance, a physical or mental inability to work.

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14
Q

Dwelling

A

The building occupied as a private residence.

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15
Q

Endorsement

A

Acknowledges a change in the terms of the contract.

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16
Q

Ethics

A

Relating to moral character. Conforming to professional standards of conduct.

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17
Q

Exclusion

A

Provision specifying the situations, occurences, or persons not covered by the policy.

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18
Q

Fiduciary

A

One who manages money or property for another.

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19
Q

Fire

A

The loss of property due to ignition or burning.

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20
Q

Floater

A

Insurance document used to provide coverage for property having a high degree of mobility.

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21
Q

Forthwith

A

Without delay. The word “forthwith” and “immediately” convey the same meaning.

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22
Q

Fraud

A

A deliberate attempt to deceive, with a view to securing some profit.

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23
Q

Friendly Fire

A

Fire contained to the place it is supposed to be, such as a fireplace.

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24
Q

Hazard

A

A condition which may cause a peril to occur.

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25
Q

Hold Harmless

A

A contractual agreement whereby one party assumes legal responsibility for the acts of another.

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26
Q

Hostile Fire

A

One which becomes uncontrollable or breaks out from where it is intended to be, and becomes a hostile element.

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27
Q

Indemnity (principle of)

A

Insurance principle which aims at ensuring the victim of a loss receives the actual amount of the loss; no more and no less.

28
Q

Insurance Interest

A

People have an insurable interest when they are able to show that they would suffer financially from a loss; a requirement of insurance contracts.

29
Q

Insurance

A

The undertaking by one person to indemnify another person against loss or liability for loss, in respect of a certain risk or peril to which the object of insurance may be exposed.

OR

To pay a sum of money/other thing of value upon the happening of a certain event.

30
Q

Loading

A

The rate over and above the fire rate which is charged by the insurer to provide additional policy coverages.

31
Q

Material Fact

A

A fact which, if the insurer knew about it, would cause it to decline the insurance altogether, or charge a higher premium for accepting it.

32
Q

Minimum Retained Premium

A

The minimum amount of premium an insurer will retain in the event the policy is cancelled prior to its expiry.

33
Q

Negligence

A

Failure to use the degree of care which an ordinary person of reasonable prudence would use under the given circumstances.

34
Q

Partial Loss

A

A loss under an insurance policy which does not either completely destroy or render worthless the insured property, or which does not exhaust the insurance limits applying thereto.

35
Q

Payee

A

One to whom insurance monies are payable in the event of a loss to insured property.

36
Q

Peril

A

The cause of loss.

37
Q

Premises

A

The land contained within the lot lines.

38
Q

Premium

A

The money for consideration paid by the insured to the insurer for insurance protection.

39
Q

Private Protection

A

Refers to the things a person has done internally to prevent or reduce loss.

40
Q

Property Damage

A

In commercial liability insurance policies: generally defined as “physical injury to tangible property”, including all resulting loss of use of that property; or loss of use of tangible property that is not physically injured”.

41
Q

Public Protection

A

Refers to the protection provided to insured property from outside sources.

42
Q

Pure Risk

A

Involves the chance of financial loss with no chance of financial gain.

43
Q

Rebate

A

Discount or reduction in stipulated premium of policy, generally by agent or broker, and intended as an enticement.

44
Q

Relative

A

One person connected to another by blood or affinity.

45
Q

Repair

A

The act of restoring a damaged structure or thing to a condition as close as possible to that in which it originally existed.

46
Q

Replacement Cost

A

The cost of replacing, repairing, constructing, or reconstructing–whichever is the least– the property on the same site with new property of like kind and quality; for like occupancy, without deduction for depreciation.

47
Q

Retention

A

Refers to “self-insurance”; a means of generating funds from within the organization to pay for losses.

48
Q

Rider

A

Adds addition coverages to the existing contract.

49
Q

Risk Control

A

A risk management technique concerned with taking measures to reduce the frequency and severity of losses.

50
Q

Risk

A

The chance of financial loss to which the object of insurance may be exposed.

51
Q

Robbery

A

Felonious taking of property from the possession of another against his will, accomplished by means of force or fear.

52
Q

Subrogation

A

Refers to the lawful substitution of a third party in the place of a party having a claim against another party. In insurance contracts, the insurer has the right to “step into the shoes” of the party whom it has compensated, and sue any party whom the compensated party could have sued.

53
Q

Theft

A

The taking of one’s property without the owner’s consent.

54
Q

Third Party

A

One who is not a party to the insuring agreement, but who may have rights therein.

55
Q

Tort

A

A legal wrong, other than breach of contract, for which the court will provide a remedy in the form of a suit for damages.

56
Q

Tortfeasor

A

One who commits a tort; a wrong-doer.

57
Q

Total Loss

A

Complete destruction of the insured property.

58
Q

Underwriter

A

a) The one assuming the risk, in return for the payment of a premium.

b) The person within the insurance comapny authorized to accept or reject applications for insurance.

59
Q

Utmost Good Faith

A

A requirement of insurance contracts; implies complete honesty, concealing nothing.

60
Q

Valued Policy

A

One in which the insured and insurer agree as to the value of the property insured in advance of any loss to it; such amount to be paid in the event of a total loss of the covered property.

61
Q

Void

A

Having no legal force or binding effect.

62
Q

Voidable

A

That which is capable of being declared void.

63
Q

Waive

A

To voluntarily give up a right.

64
Q

Waiver

A

The unilateral and voluntary relinquishment of a known right.

65
Q

Waiver of Consurance

A

A clause contained in commercial property insurance policies which provides that the coinsurance penalty will not be applied in situations involving small losses even though insured may not be in compliance with coinsurance requirements (i.e. pentaly waived for losses which are less than 2% of amount of insurance and less than $5000).

66
Q

Warranty

A

A promise that certain facts are truly as they are represented to be and that they will remain so.

Fundamentals of Insurance Level One (4 decks)

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