Module 1-B-Characteristics of Insurance Contracts Flashcards
Adhesion
The insurer is responsible for the terms of the contract
The insured has no say in the wording
Courts factor the insured in the event of an ambiguity
Certificate of Insurance
An official document that contains the details of an insurance policy.
Conditions
The section of an insurance policy that qualifies or limits an insurer’s promise to pay or perform
Coverages
The amount and extent of protection provided by an insurance policy.
Declarations Page
Summary of policy, includes names of insured, addresses, coverage limits, policy period, etc.
Definitions
Page in policy that gives specific limited meaning to terms used in policy.
Endorsements
An optional provision where additions to the policy to add or change coverage.
Also called a rider
Exclusions
What the policy does not cover
Good Faith
Acting honestly and fairly, with good intentions and full disclosure.
Insuring Agreement
What is covered and what losses are covered. Includes
list of covered property and perils.
Legal Purpose
The purpose of the contract
must be legal
Stipulation
A stipulation is something specifically agreed to in a contract, such as an insurance
contract.
Unilateral
A characteristic of insurance contracts. It means that only one of the parties (the insurer)
makes a promise to perform.
Utmost Good Faith
All parties to an insurance contract must act with utmost good faith. It also applies to a fiduciary agent’s
responsibility towards the principal.
