insurance law Flashcards
Insurance
management and reduction of risk; allows an individual to engage in risky behavior without fear of loss
risk pooling
the combination of individuals’ financial resources in order to calculate a premium. This reduces the “cost” of risk
Risk Transfer
relies on one party assuming risk. Risk is transferred to a third party
Insurable interest
party benefits more from the insured item’s continued existence than without it. An asset that needs to be preserved is valuable and thus should be insured
Moral hazard
Even though someone has something “valuable” they change their calculus and decide that they are better of losing it and collecting the money awarded. Arson is a common example of this
Exclusions
you get coverage for loss except if you violate policy. this encompasses intentional acts that cause loss.
Disclosure
individual must disclose information about what they intend to insure because the risk of loss is potentially greater in certain cases
insurance coverage litigation
what did someone disclose, and how was it treated
Terms of art
not common sense, cannot be logically applied
Occurrence Policy
if there is a loss during the policy period, it is covered. If it is outside, it is not covered
Claims made policy
even if the loss occurred outside the policy period, you are still covered
Declarations page
lists the coverage you have
liability coverage
if you are sued for a car crash, the company can pay if you are liable
Comprehensive coverage
covers everything other than you being at fault
Uninsured
if you are hit or injured by someone who has no insurance or coverage and you cannot adequately recover from their insurance, you can demand that your insurance pays for the damages
