Study 4 From Quote to Policy - Key Terms

Question 1

binding authority

Answer 1

The capacity to confirm to people who have submitted insurance coverage. It gives agents or brokers the power to make decisions that enter insurers into contacts of insurance.

Question 2

binder

Answer 2

A written or oral agreement given by an insurer to insure a risk, pending the issuance of a formal policy. A binder is deemed to be the policy and must be cancelled in the same manner.

Question 3

interim receipt

Answer 3

A temporary measure to insure in an agreed manner while waiting for the completed policy to be issued. Also known as a “binder”.

Question 4

transportation network

Answer 4

An online-enabled application or website used by personas to prearrange the transportation of passengers for compensation by a transportation network driver. Also called ridesharing services.

Question 5

ridesharing

Answer 5

An arrangement set up by means of a website or mobile app in which a passenger travels in a private vehicle driven by its owner, for free or for a fee.

Question 6

cover note

Answer 6

A document with insurance, or the insurance protection provided.

Question 7

statutory conditions

Answer 7

Special prescribed and standardized conditions that the provincial and territorial insurance acts require to be included in insurance policies.

Question 8

general conditions

Answer 8

Conditions of a contract that set the minimum performance requirements for the contractor. These conditions also include the rights and responsibilities of the parties involved.

Question 9

declarations

Answer 9

Statements included in a policy that are agreed to by the insured and form the basis of the contract of insurance.

Question 10

deductible

Answer 10

An agreed specified amount that the insured must pay on a claim before the insurance company will cover the resto for the claim. This amount is agreed upon by both the insurer and the insured. An insured’s obligation to pay a deductible is not based on whether the insured is at fault.

Question 11

policy conditions

Answer 11

Provisions that state the rights and duties of the insured or insurer.

Question 12

void contract

Answer 12

An illegal contract. In law a contract that was never made or never existed. For example, one cannot enter into a contract to commit an illegal act like theft and have it stand up in court. Such a contract is considered a void contract.

Question 13

warranty

Answer 13

Statement or stipulation or promise in an insurance contract, the breach of which may nullify the contract.

Question 14

subscription policy

Answer 14

A single policy covering a risk that is divided among a number of insurers; the policy is issued by the “lead” company (usually the one with the largest percentage) and signed by all participating companies.

Question 15

contra proferentem

Answer 15

A legal term that provides that any ambiguity in a contract must be interpreted against the person who drew the contract because that person had the opportunity to make it clear.