Key Terms 1 & 3 Flashcards
application
A request an insured for insurance. Applications may be done verbally, in writing, or online. The insured provides information relating to the subject for insurance. The insurer then assesses this information and decides whether to accept the risk for insurance and on the terms of such acceptance.
applicatn
The person or firm requesting insurance. That party answers oral questions or completes and signs written forms that contain information to assess the risk.
disclosure
- General – The process of revealing all relevant facts.
- Law – The requirement that parties to a litigation disclose relevant information, or the material documents that a party intends to rely on to support his or her case, to the opposing side.
misrepresentation
Incorrect or missing information about a material fact that is offered, or not, by an applicant or insured with or without the intent to mislead.
representation
A statement or conduct made to influence an insurer to decide on a risk. The decision includes declining or accepting the risk and deciding the rate and premium to be charged. In insurance, these statements are said to be “material to the risk” and are enough to void a policy ab initio (Latin term meaning “from the beginning”)
named insured
The person or party designated in the policy as the insured, who has certain rights under the policy, as opposed to someone who may be covered by the policy but is not specifically named and does not have the same rights as the named insured.
insurable interest
An interest that the insured must have in the subject matter of the insurance purchased so that if the event insured against occurs, the insured will suffer a pecuniary loss.
effective date
The date of inception of an insurance policy, or the date additional coverages become effective.
expiry
End of the policy period.
loss payee
A person or an entity other than the named insured to whom the proceeds of insurance will be paid.
mortgagee
A special class of loss payee that has a registered interest on real property offered as security for the money that the mortgagee has loaned the property owner.
mortgage clause
A clause in an insurance policy that stipulates the rights and obligations of the insurer and the mortgagee.
underwrite
To insure. More commonly, to scrutinize a risk and then decide on its eligibility for insurance.
underwriter
- The insurance company or group that underwrites or insures a particular risk.
- The individual within an insurance company whose responsibility it is to accept or reject business in the particular line in which she specializes and, in this way, choose the risks her principals are prepared to underwrite.
special hazards
Foreseen hazards/risks common to certain types of businesses that are not covered in an ordinary policy. For example, woodworking plants and paint shops.
