P and C 2 General Insurance Flashcards
Peril
The events or happenings which cause a loss.
Premium
- Consideration for the insurance
2. Periodic payment made to keep a policy in force
Insured
The party to an insurance agreement to whom, or on behalf of whom, the insurance company agrees to indemnify for losses, provide benefits, or render service.
Insurer
The insurance company assuming risk and agreeing to pay claims or provide services. Also known as the carrier.
Agent
An individual appointed by an insurance company to solicit, negotiate, effect, or counter sign insurance contracts on its behalf.
Aleatory
The number of dollars to be paid by each party is unequal in an insurance contract.
Binder
A temporary policy
Broker
An individual who represents an insured (client).
Conditions
The portion of an insurance contract that sets forth the rights and duties of the insured and the insurance company.
Contract
A legal agreement between two parties promising a certain performance in exchange for a certain consideration.
Estoppel
This concept is related to waiver. Once a person or company waives a known right, the waiver cannot be reversed.
Fiduciary
A person who occupies a position of special trust and confidence for example, in handling or supervising the affairs or funds of another.
General agent
An individual appointed by an insurer to administer its business in a given territory. A GA is responsible for building the agency and service force. Compensation is on a commission basis, although there may be additional expense allowances.
Hazard
A condition that increases the chance of a loss occurring.
Indemnity
Insurance is designed to restore the policy owner to the same financial condition enjoyed prior to a loss. The intent is to cover the amount of the actual loss only and to avoid paying amounts that allow someone to profit from a loss situation.
Insurance Interest
A condition where an individual or entity may suffer economic loss if property is damaged or destroyed.
Liability
Broadly, any legally enforceable obligation. The term is most commonly used in a pecuniary (money-related) sense.
Mass Marketing System
There are numerous types of marketing methods available to insurers, such as agency systems, direct-selling, independent agency systems, and exclusive agency systems.
Policy
The written contract or certificate effecting insurance, including papers attached to and made a part of it.
Property Insurance
Insurance that indemnities a person with an interest in property for its loss.
Pure Risk
A risk in which there is no chance of gain, only loss.
Surplus Lines Agent
An agent licensed by the state to handle the placement of business with non-admitted insurers.
Unilateral
Only the insurer makes legally enforceable promises in the contract. The insured is not required to pay the premiums, but the insurer is required to pay the benefits under the contract if the insured has paid the premiums and met certain other basic provisions.
