Policy provisions and Contract Law Flashcards
(30 cards)
What are the four elements of an insurance contract?
Agreement (offer and acceptance), consideration, competent parties, and legal purpose
What is proof of lose?
A sworn statement from an insured notifying the insurer about a loss
What provision defines how a policy will respond if there is more than one insurance policy written on the same risk?
other insurance
What insurance principle does pro rata liability protect
Indemnity
What does an endorsement do to an insurance contract?
It modifies the policy’s original terms.
What is consideration on the part of the insurer?
A promise to pay in the event of a loss
What does the term unilateral contract mean?
A unilateral contract is a one-sided contract. This means only one party makes an enforceable promise
What part of an insurance policy contains the insurer’s promise to pay a claim?
Insuring agreement
What is a binder?
temp insurance while everything is being confirmed
What process is used to settle a casualty claim when the insured and the insurer cannot agree?
Arbitration
What part of an insurance policy indicates the general rules or procedures that the insurer and insured agree to follow under the terms of the policy?
Conditions
What is the difference between cancellation and nonrenewal?
Cancellations is the termination of an insurance policy by either party prior to the policy’s expire date. Nonrenewal is the termination of a policy at its expiration date by not offering a continuation of existing policy.
What is additional coverage in an insurance policy?
A provision that adds more coverage for a specific loss at no additional premium
Who is an insured in property and casualty insurance?
Anyone covered under the policy, even if not specifically named
Info. about changes to the policy or return of premium can be found in what section of a policy?
Conditions
What are an insured’s duties after loss?
Protect the damaged property from further dmg, prepare an inventory of dmg property, cooperate with the insurer in settling a loss, notify police in case of theft; and submit proof of loss.
In insurance contracts, when is the offer usually made?
When the insurance application is submitted
In insurance contracts, when does acceptance usually occur?
When the insurer approves a prepaid application
What is consideration in an insurance contract?
Consideration is something of value that each party gives to the other. Consideration on the part of the insurer is binding.
When does pro rata liability apply?
When an insured has more than one policy covering a loss
When is an appraisal needed and how can it be requested?
If an insured and an insurer disagree about the value of a property loss, either party can make a written demand for an appraisal.
What is a warranty in an insurance contract?
An absolutely true statement upon which the validity of the policy depends.
What part of a policy shows the amount of insurance, premium, and policy term?
Declarations
Persons who are not named on the declaration page of a policy but who are protected by the policy are known as what type of insured?
Additional insured
