Important Terms

Question 1

Binder

Answer 1

A temporary contract provided by an insurer, which ensures coverage until the complete, permanent policy is issued.

Question 2

Concealment

Answer 2

The act of withholding relevant material facts from an insurer.

Question 3

Estoppel

Answer 3

A legal principle that bars a party from asserting something contrary to what has been implied by his previous actions or statements. This is a form of “implied waiver”; for example, if the insurer regularly accepts late payments, it waives its right to deny coverage due to late payments,

Question 4

First Named Insured

Answer 4

The first person entity named as insured on the declarations page of a policy.

Question 5

Misrepresentation

Answer 5

Any false or misleading statement.

Question 6

Policy Period

Answer 6

The beginning and end dates of coverage. Found on the declarations page

Question 7

Waiver

Answer 7

A waiver is a voluntary act of relinquishing a known right, claim or privilege. Either an insured or an insurer may waive rights. There are two types: Express and implied.

Question 8

Express Waiver

Answer 8

An explicit relinquishment of a right.

Question 9

Implied Waiver

Answer 9

An Implicit relinquishment of a right through behavior that seems to assume that the right does not exist.

Question 10

Warranty

Answer 10

An ongoing assurance made by the insured that certain conditions in an insurance contract will be met (for example, that the insured will maintain functional fire alarms).