P and C 5 Homeowner's Policy Flashcards
Salvage
Property taken over by an insurance company to reduce its loss. The company may dispose of, or salvage, property as it wishes, but on request and proper reimbursement, may return it to the insured.
Property Coverage
Four basic areas of the Homeowners contract that provide coverage for an insured’s property: 1) Dwelling, 2) Other Structures, 3) Unscheduled Personal Property, 4) Loss of Use.
Bodily Injury
Usually defined to include bodily harm, sickness, or disease, also including required care, loss of services, and resulting death.
Subrogation
The transfer to the insurance company of the insured’s right to collect for damages. After paying a claim, the company stands in the place of the insured in suing the negligent party, thus preventing the insured from collecting twice.
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.
Insurer
The insurance company assuming risk and agreeing to pay claims or provide services. Also known as the carrier.
Insuring Agreement/Clause
The provision of an insurance policy containing the insurance company’s promises. It establishes the obligation of the company to provide the insurance coverages as stated in the policy.
Pro-Rata Cancellation
The termination of a contract with premium charge being adjusted in proportion to the exact time the protection has been in force. All unearned premium is returned to the insured.
Pro Rata Liability Clause
Clause in a Fire policy that provides a method of sharing loss when more than one policy is applicable. Each company covers no more than its share. Also known as the Other Insurance Clause.
Property Damage
A type of loss covered under many liability contracts. Includes the insured’s liability for damage to property of others or loss of use of tangible, physical property.
Time-element Coverage
Provides protection for indirect loss that occurs when, following a direct property loss, there is a time lapse before the property can be used again. Includes business income, contingent business income, extra expense, and fair rental value.
Unoccupancy
The absence of people, their return expected. Property coverage on a building is sometimes restricted when thee are long periods of vacancy, but not unoccupancy.
Abandonment
A condition imposed upon the insured stating that he may not abandon damaged property to the insurance company. The insured has a duty or obligation to comply with specific requirements in the event a loss occurs.
