property&casualty terms Flashcards
the abdication of insured property into the hands of another, or into the possession of no one in particular
abandonment
a type of liability that occurs due to extremely dangerous operations, such as the use of explosives or working at extreme heights
absolute liability
an unplanned, unforeseen event which occurs suddenly and at a specific time
accident
the required amount to pay damages or for property loss, which is calculated based on the property’s current replacement value minus depreciation
actual cash value (acv)
a provision in an insurance policy that allows for more coverage for specific loss expense without increase in premium
additional coverage
individuals or business that are not names as insured on the declaration page, but are protected by the policy, usually in regard to a specific interest
additional insureds
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
adhesion
an insurance company authorized and licensed to transact business in a particular state
admitted insurer
the tendency of risks with higher probability of loss to purchase and maintain insurance more often than the risks who present lower probability
adverse selection
an individual who is licensed to sell, negotiate, or effect insurance contracts on behalf of an insurer
agent
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 may occur
aggregate limit
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
agreed value
a contract in which the participating parties agree to exchange unequal amounts. Insurance contracts are aleatory in that the amount the insured will pay in premiums in unequal to the amount the insurer will pay in the event of a loss
aleatory
an insurance company that is incorporated outside the United States
alien insurer
the appearance or the assumption of authority based on the actions, words, or deeds of the principal or because of circumstances the principal created
apparent authority
an assessment of property to determine wither the correct amount of insurance to be written or the amount of loss to be paid
appraisal
method of claim settlement used when the insured and insurer cannot agree upon the amount of the loss
arbitration
the transfer of a legal right or interest in an insurance policy. In property and casualty insurance, assignments of policies are usually valid only with the prior written consent of the insurer
assignment
an insurance company that has qualified and received a Certificate of Authority from the Department on Insurance to transact insurance in the state
authorized insurer
a land motor vehicle, trailer or semi-trailer designed for use on public roads, including attached machinery or equipment; auto does not include mobile equipment
auto
a method of dealing with risk by deliberately keeping away from it (e.g. if a person wanted to avoid the risk of being killed in an airplane crash, he/she might choose never to fly in a plane)
avoidance
a person or entity that has possession of personal property entrusted to him/ her by the owner. For example, a tv repair person that has possession of a customer’s tv would be a bailee
bailee
the person who receives the proceeds from the insurance policy
beneficiary
a temporary contract that puts an insurance policy into force before the premium has been paid
binder
a type of bond that covers losses caused by dishonest employees
blanket bond
a single property insurance policy that provides coverage for multiple classes of property at one location, or provides coverage for one or more classes of property at multiple locations
blanket insruance
legal liability arising from death or physical trauma to a person as a result of a negligent or purposeful act and omissions by an insured
bodily injury liability
an unfair trade practice in which one person refuses to do business with another until he or she agrees to certain conditions
boycott
a commercial property form that covers buildings under construction
builder’s risk coverage form
a commercial property form that covers buildings, and/or their contents
building and personal property coverage form
the forced entry into another’s premises with felonious intent
burglary
the termination of an in-force insurance policy by either the insured or the insurer prior to the expiration date shown in the policy
cancellation
a type of insurance that covers losses caused by injury to persons or damage to the property of others
casualty insruance
a demand of a person to stop committing an action that is in violation of a provision
cease and desist order
a document that authorizes a company to start conducting business and specifies that kind(s) of insurance a company can transact. It is illegal for an insurance company to transact insurance without this certificate
certificate of authority
a legal document that indicates that an insurance policy has been issues, and that states both the amounts and types of insurance provided
certificate of insurance
a demand made by the insured to cover a loss protected by the insurance policy
claim
the practice of computing a price per unit on insurance that applies to all applicants possessing a given set of charactersitics
class rating
an unfair trade practice in which an insurer uses physical or mental force to persuade an applicant to buy insurance
coercion
an agreement between an insurer and insured in which both parties are expected to pay a certain portion of the potential loss and other expenses
coinsurance
a single dollar limit of liability applying to the total damages for bodily injury and property damages combined, resulting from one accident/ occurrence
combined single
type of insurance that pertains to business, mercantile or manufacturing establishments
commercial lines
the chief executive and administrative officer of a state insurance
commissioner (superintendent, director)
an unwritten body of law based on past judicial decisions as well as usages and customs
common law
a written statement of a liability claim given by the claimant; a reason for a lawsuit
complaint
factors the determine rates, including loss reserves, loss adjusting expenses, operating expenses and profits
components
also known as other than collision coverage, it covers losses by fire, theft, vandalism, falling objects, etc.
comprehensive coverage
the withholding of known facts, which, if material, can void a contract
concealment
a type of an agreement in which both parties must perform certain duties and follow rules of conduct ti make the contract enforceable
conditional contract
the section of an insurance policy that indicates the general rules or procedures that the insurer and insured agree to follow under the terms of the policy
conditions
the binding force in a contract that requires something of value to be exchanges for the transfer of risk. The consideration on the part of the insured is the representations made in the application and the payment of premium; the consideration on the part of the insurer is the promise to pay in the event of loss
consideration
a person who, for a fee, offers any advice, counsel, opinion, or service regarding the benefits, advantages, or disadvantages promised under a policy of insurance
consultant
written and/ or oral statements regarding a costumer’s credit, character, reputation, or habits collected by a reporting agency from employment records, credit reports, and other public rescources
consumer reports
an agreement between two or more parties enforceable by law
contract
an entity that obtains and possesses a license solely for the purpose of writing business on the owner, immediate family, relatives, employer and employees
controlled busines
multiple events leading to one loss
concurrent causation
the amount payable upon the death of a person whose life is insured
death benefit
the section of an insurance policy containing the basic underwriting info, such as the insured’s name, address, amount of coverage and premiums, and a description of insured locations, as well as an supplemental representations by the insured
declarations
the portion of the loss that is to be paid by the insured before any claim benefits may be paid by the insurer
deductible
an unfair trade practice in which one agent or insurer makes an injurious statement about another with the intent of harming the persons or company’s reputation
defamation
a condition that allows the insurer to audit the insured’s books or records at the end of the policy term to make sure adequate premium has been collected for the exposure
deposit premium audit
the lessening value of real and personal property due to age and wear and tear
depreciation
physical damage to buildings and/ or personal property as a result of direct consequence of a particular peril
direct losses
the head of the state department of insurance
director( commissioner, superintendent)
a physical/ mental impairment, either congenital or resulting from an injury or sickenss
disability
an act of identifying the name of the producer, representative or firm, limited insurances representative, or temporary insurance producer on any policy solicitation
disclosure
an insurance company that is incorporated in the state
domestic insurer
insurer’s location of incorporation and the legal ability to write business in a state
domicile of insurer
the estimated total cost (both insured and uninsured) of an accident
economic loss
a printed addendum to a contract that is used to change the policy’s original terms, conditions, or coverages
endorsement
a legal impediment to denying a fact or restoring a right that has been previously waived
estoppel
a policy that only pays for loss after the primary policy has paid its limit
excess policy
causes of loss, exposures, conditions, etc. listed in the policy for which the benefits will not be paid
exculsions
an agent who represents only one company and is compensated by commissions
exclusive or captive agent
method of determining the premium based on the insured’s own past loss experience
experience rating
a unit of measure to determine rates charged for insurance coverage
exposure
the authority granted to an agent by means of the agent’s written contract
express authority
a provision in some property policies which allows the extension of a major coverage to certain types of loss to property not specifically insured
extensions of coverage
fair access to insurance requirements plan is a state-run program that makes insurance obtainable to those in high risk areas who have been unable to acquire insurance through other channels
FAIR plan
an agent/ broker who handles the insurer’s funds in a trust capacity
fiduciary
