Study 3: Underwriting the Applicant - Key Terms Flashcards
Additional named insured
Any party, other than the original named insured, identified as an insured in the policy declarations. An additional named insured has more rights under the policy than does an additional insured but also more responsibilities.
Additional insured
A person other than the named insured who is protected by the terms of the policy. The additional insured may be named or unnamed.
Named insured
The person or party designated in the policy as the insured, who has certain rights under the policy, as opposed to someone who may be covered by the policy but is not specifically named and does not have the same rights as the named insured.
Morale hazard
A hazard that is based on the insured’s attitude toward the insured belongings. This hazard exists when the insured no longer cares about the possessions because they are insured.
Personal-lines insurance
Insurance for individuals and families, such as private passenger auto insurance and homeowners policies.
Business insurance
A broad name for different coverage available to a business owner to protect against losses and to insure the continuing operation of the business. Business insurance includes business property, life, accident, and sickness including that for key employee(s), liability, and fleet of automobile.
Homeowners policy
A multi-peril insurance policy for dwelling risks, combining coverages for fire and extended coverages, including theft and liability.
Application
A request by an insured for insurance. Applications may be done verbally, in writing, or online. The insured provides information relating to the subject for insurance. The insurer then assesses this information and decides whether to accept the risk for insurance and on the terms of such acceptance.
Back-dated policy
A policy that will become effective retroactively after the applicant applies for it.
