Insurance Definitions

Question 1

Vandalism

Answer 1

Damage to the property without regard to ownership

Question 2

Co-Insurance

Answer 2

Clause added to commercial policy by underwriters. Is for partial losses less than insurance.

Question 3

Malicious Acts

Answer 3

Damage to the property due to ownership

Question 4

Subscription Policy

Answer 4

2 or more insurance companies subscribing to the policy

Question 5

Manuscript Wording

Answer 5

a wording which is a one of a kind wording. A wording designed for a one of a kind risk. (CN Tower) - does not use pre-printed wording that everyone uses

Question 6

Re-Insurance

Answer 6

Insurance for insurance companies. ex: house - half you insure, other half insurance

Question 7

Legal Entity

Answer 7

Someone who can sue or be sued. Ex: Ltd, Corporation

Question 8

Contract

Answer 8

An agreement between 2 or more parties which is enforceable at law

Question 9

Frequency

Answer 9

Based on the percentage of business

Question 10

Lloyds of London (Farmers Market)

Answer 10

It’s a market! Not an Insurance Company! A place to do business. Ex: Vendors go to do business, a syndicate.

Question 11

Estoppel

Answer 11

You cannot deny what you have already said

Question 12

Property & Casualty OR General Insurance

Answer 12

Everything other than life and health

Question 13

Risk

Answer 13

The chance of loss

Question 14

Proximate Cause

Answer 14

The immediate and effective cause of the loss. Ex: Wind started tornado and there is no break

Question 15

Hazard ( 2 Hazards: physical and moral)

Answer 15

Is a condition which may cause a peril to occur or make the loss more severe

Question 16

Waiver (Premium)

Answer 16

The relinquishment of a known right

Question 17

Damages (Sean Slip and Fall)

Answer 17

Monetary compensation to the plaintiff for bodily injury or property damage

Question 18

Third Party

Answer 18

Anyone outside insurance contract who takes action against insured. (contract) *That’s why we buy liability insurance

Question 19

Tort

Answer 19

You have been legally wronged

Question 20

Replacement Cost

Answer 20

Today’s value without deduction or depreciation. *W/e it costs to replace jeans, umbrella, etc.

Question 21

Material Facts

Answer 21

Anything about the risk, the underwriter needs to know to accept or reject and the terms of conditions to be added to the policy. (if accepted)

Question 22

Misrepresentation

Answer 22

When the clients don’t give the facts

Question 23

Void/ Voidable Policy

Answer 23

When there is misrepresentation of the insurer, the void policy means; never existed. Any premium received must be returned in full

Question 24

Peril

Answer 24

An event that may cause a loss to occur. * Tornado Story: Wind=Tornado=Damage

Question 25

Indemnity

Answer 25

To put you back in the same financial position, just prior to the loss. NO BETTER NO WORSE

Question 26

Writ

Answer 26

Legal notice tell you you have been sued

Question 27

First Party

Answer 27

The Insured

Question 28

Second Party

Answer 28

The Insurer

Question 29

Actual Cash Value

Answer 29

Today's price, less depriciation. Replacment cost less depriciation.

Question 30

Negligence

Answer 30

What a reasonable and prudent person would or would not do in a similar situation. *pool story, to put the fence around the pool.

Question 31

Insurance

Answer 31

The premium of the many pays the losses of the few