Key Terms Flashcards
Certificate of Insurance
A Statement evidencing that a policy has been written and stating the
coverages in general.
Coinsurance / Insurance to Value
a Requirement that the insured carry insurance equal to a specified percentage of the value, to be fully indemnified under the policy. Provides a proper basis for
setting rates.
Limits of Liability
The sum or sums beyond which a liability insurance company does not protect the insured on a particular policy.
Personal / Injury Liability
Liability insurance coverage for third party claims for damages which are other than physical such as libel slander, false arrest, wrongful eviction and invasion of privacy.
Bodily Injury Liability
The Liability which may arise from injury or death of another person.
Property Damage Liability
Protection against liability for damage to the property of another not in the
care, custody and control of the insured, as distinguished from liability for bodily injury.
Fair Credit Reporting Act
Public law requires that an applicant be advised that a consumer report may be requested and given info regarding the agency should applicant be declined.
Claims Made policy form
Policy providing liability coverage only if a written claim is made during the policy period or any applicable extended reporting period.
Deposit premium / Audit -
The premium deposit required by the company on those forms of insurance subject to periodical premium adjustment.
Insured Contract
Definition which shapes the extent of contractual liability coverage by describing the types of contracts which are insured.
Other Insurance
The existence of another contract covering the same interest and perils.
Binders
Is a temporary contract of insurance, oral or written, offered by an insurer of agent pending issuance of the policy. It is usually written for a period of thirty days or sixty days and remains in force for that period or until permanent policy is either issued or rejected.
Mortgagee Rights
Mortgagees right of recovery shall not be defeated by any act or neglect of the insured and giving the mortgagee other rights and privileges.
Other Insurance Provision
a Provision found in practically every insurance policy, stating what is to be done in case any other contract of protection embraces the same property and / or hazard.
Liability
Any legally enforceable obligation.
Occurrence
a Sudden, unexpected, unforeseen event resulting in a loss including repeated and continuous exposure to conditions.
Insurance
A social device that protects people and businesses against certain types of losses.
Indemnity-
insurance is designed to restore the policyholder to the same financial condition enjoyed prior to the loss.
Peril
is the cause of a potential loss. It is immediate and specific.
Hazard
anything that increases the seriousness of a loss.
3 Types:
Physical= oily rags ex.
Moral= arsonist Morale= who cares?
A condition that gives rise to a peril.
Representations
on an application, facts that the applicant represents as true and accurate to the best of his or her knowledge and belief.
Warranties
a statement made on an application for insurance that is warranted to be true in all respects.
Subrogation
policyholder transfers the right of legal action against a responsible third party to the insurer.
Salvage
property taken over by an insurance company to reduce its loss.
Insurable Interest
in order to purchase insurance, one must have an insurable interest in the subject
of the insurance. In P&C, insurable interest must exist at time of loss.
Theft
- any act of stealing.
Burglary
breaking entering into premises of another, with felonious intent and with visible signs of forced entry.
Robbery
the felonious taking by force or fear of force, of the personal property of another.
Mysterious Disappearance
the vanishing of insured property in an unexplained manner.
Proof of Loss
formal statement made by the insured to the insurance company regarding a loss.
Negligence
failure to do what a reasonably prudent person would do under the same circumstances.
Unoccupancy
furnished but unused.
Vacancy
has neither occupants or contents.
Vacancy
has neither occupants or contents.
Elements of a Contract
to establish a valid contract you need: (C.L.A.P.) Legally competent parties
Offer and acceptance
Valid consideration
Legality of purpose
Risk
the uncertainty about loss. Only pure risks are insurable these involve the uncertainty of loss without any possibility of gain.
Proximate Cause
when an uninterrupted chain of events resulting from a negligent act causes a loss.
Concealment
the with-holding of facts by an applicant for insurance that affects an insurance risk or
loss.
Assignment
transfer of rights in a policy to other than the policyholder.
Appraisal
means to settle indemnification disputes.
Pair and Set Clause
in the case of a loss the insurance company may repair or replace any part, or pay the value before and after the loss.
Declarations
portion of an insurance contract that informs who and what is covered, in addition to when coverage is effective.
Loss
is any reduction in the quality, quantity or value of something
Direct - property is lost, stolen, damaged, or destroyed.
Indirect - related to direct losses may also be covered. Loss of housing or business due to fire eg.
Actual Cash Value
is equal to the replacement cost less depreciation.
Replacement Cost
the cost of replacing property without deduction for depreciation.
Right of Salvage
Insurance companies generally have a right to salvage property which has only been partially damaged or which has been destroyed but still has a salvage value.
Cancellation
termination of contract of insurance in force by voluntary act of the insurance company or insured by contract provision or mutual agreement.
Nonrenewal
termination of insurance coverage at an expiration date or anniversary date.
Definition of the Insured
the party to an insurance arrangement to whom, or on behalf of whom, the insurance company agrees to indemnify for losses, provide benefits or render service.
Abandonment
the insured cannot just hand over the insurance company, declaring it unsuitable without other pieces from a grouping to be paid for the property as a loss even though it was not damaged.
