Property + Casualty Flashcards
Abandonment
The abdication of insured property into the hands of another, or into the possession of no one in particular.
Absolute Liability
A type of liability that occurs due to extremely dangerous operations, such as the use of explosives or working at extreme heights.
Accident
An unplanned, unforeseen event which occurs suddenly and at a specific place.
Actual Cash Value (ACV)
The required amount to pay damages or for property loss, which is calculated based on the property’s current replacement value minus depreciation.
Additional Coverage
A provision in an insurance policy that allows for more coverage for specific loss expense without increase in premium.
Additional Insureds
Individuals or business that are not named as insured on the declaration page, but are protected by the policy, usually in regard to a specific interest.
Adhesion
A contract offered on a “take-it-or-leave-it” basis by an insurer, in which the insured’s only option is to accept or reject the contract. Any ambiguities in the contract will be settled in favor of the insured.
Admitted Insurer
An insurer company authorized and licensed to transact business in a particular state.
Adverse Selection
The tendency of risks with higher probablility of loss to purchase and maintain insurance more often than the risks who present lower probability.
Agent
An individual who is licensed to sell, negotiate, or effect insurance contracts on behalf of an insurer.
Aggregate Limit
The maximum limit of coverage available under a liability policy during a policy year regardless of the number of claims that may be made or the number of accidents that occur.
Agreed Value
A property policy with a provision agreed upon by the insurer and insured as to the amount of insurance that represents a fair valuation for the property at the time the insurance is written.
Aleatory
A contract in which the participating parties agree to exchange unequal amounts. Insurance contracts are aleatory in the amount the insured will pay in premiums in unequal to the amount the insurer will pay in the event of a loss.
Alien Insurer
An insurance company that is incorporated outside the US.
Apparent Authority
The appearance or the assumption of authority based on the actions, words, or deeds of the principal or because of circumstances the principal created.
