Chapter 10 Vocab (Text)

Question 1

Declarations

Answer 1

statements that provide information about the particular property or activity to be insured

Question 2

Insuring Agreement

Answer 2

summarizes the major promises of the insurer

Question 3

Named-Perils Policy

Answer 3

only those perils specifially named in the policy are covered

Question 4

Open-Perils Policy

Answer 4

all losses are covered except those losses specifically excluded

Question 5

Special Coverage Policy

Answer 5

An Open-Perils Policy

Question 6

Exclusions

Answer 6

basic part of any insurance contract; exceptions to an insurance contract

Question 7

Conditions

Answer 7

provisions in the policy that qualify or place limitations on the insurer’s promise to perform

Question 8

Named Insured

Answer 8

person or party named on the declarations page of the policy

Question 9

First Named Insured

Answer 9

first name that appears on the declarations page of the policy as an insured

Question 10

Other Insureds

Answer 10

persons or parties who are not insured under the named insured’s policy even though they are not specifically named in the policy

Question 11

Additional Insured

Answer 11

a person or party who is added to the named insured’s policy by an endorsement

Question 12

Endorsements and Riders

Answer 12

In property and casualty insurance, means a written provision that adds to, deletes from, or modifies the provisions in the original contract. In life and health insurance, a rider is a provision that amends or changes the original policy

Question 13

Deductible

Answer 13

a provision by which a specified amount is subtracted from the total loss payment that otherwise would be payable

Question 14

Straight Deductible

Answer 14

the insured must pay a certain number of dollars of loss before the insurer is required to make a payment

Question 15

Aggregate Deductible

Answer 15

all losses that occur during a specified time period, usually a policy year, are accumulated to satisfy the deductible amount

Question 16

Calendar Year Deductible

Answer 16

Type of aggregate deductible that is found in individual and group medical expense policies

Question 17

Elimination/Waiting Period

Answer 17

stated period fo time at teh beginning of a loss ruing which no insurance benefits are paid

Question 18

Coinsurance Clause

Answer 18

in a property contract, encourages the insured to insure the property to a stated percentage of its insurable value. if it is not met at the time a loss, the insured must share in the loss as a coinsurer

Question 19

Equity in Rating

Answer 19

fundamental purpose of coinsurance

Question 20

Coinsurance Clause

Answer 20

a provision that requires the insured to pay a specified percentage of covered medical bills in excess of the deductible

Question 21

Other-insurance provisions

Answer 21

typically present in property and casualty insurance and health insurance contracts; apply when more than one contract covers the same loss; purpose is to prevent profiting from insurance and violation of the principle of indemnity

Question 22

Pro Rata Liability

Answer 22

generic term for a provision that applies when two ore more policies of the same type cover the same insurable interest in the property

Question 23

Contribution by Equal Shares

Answer 23

another type of other-insurance provision that often appears in liability insurance contracts

Question 24

Primary and Excess Insurance

Answer 24

Another type of other-insurance provision. The primary insurer pays first and the excess insurance pays only after the policy limits under the primary policy are exhausted

Question 25

Coordination of Benefits

Answer 25

provision is designed to prevent overinsurance and the duplication of benefits if one person is covered under more than one group health insurance plan