property&casualty terms Flashcards
(200 cards)
1
Q
the abdication of insured property into the hands of another, or into the possession of no one in particular
A
abandonment
2
Q
a type of liability that occurs due to extremely dangerous operations, such as the use of explosives or working at extreme heights
A
absolute liability
3
Q
an unplanned, unforeseen event which occurs suddenly and at a specific time
A
accident
4
Q
the required amount to pay damages or for property loss, which is calculated based on the property’s current replacement value minus depreciation
A
actual cash value (acv)
5
Q
a provision in an insurance policy that allows for more coverage for specific loss expense without increase in premium
A
additional coverage
6
Q
individuals or business that are not names as insured on the declaration page, but are protected by the policy, usually in regard to a specific interest
A
additional insureds
7
Q
a contract offered on a “take-it-or-leave-it” basis by an insurer, in which the insured’s only option is to accept or reject the contract. Any ambiguities in the contract will be settled in favor of the insured
A
adhesion
8
Q
an insurance company authorized and licensed to transact business in a particular state
A
admitted insurer
9
Q
the tendency of risks with higher probability of loss to purchase and maintain insurance more often than the risks who present lower probability
A
adverse selection
10
Q
an individual who is licensed to sell, negotiate, or effect insurance contracts on behalf of an insurer
A
agent
11
Q
the maximum limit of coverage available under a liability policy during a policy year regardless of the number of claims that may be made or the number of accidents that may occur
A
aggregate limit
12
Q
a property policy with a provision agreed upon by the insurer and insured as to the amount of insurance that represents a fair valuation for the property at the time the insurance is written
A
agreed value
13
Q
a contract in which the participating parties agree to exchange unequal amounts. Insurance contracts are aleatory in that the amount the insured will pay in premiums in unequal to the amount the insurer will pay in the event of a loss
A
aleatory
14
Q
an insurance company that is incorporated outside the United States
A
alien insurer
15
Q
the appearance or the assumption of authority based on the actions, words, or deeds of the principal or because of circumstances the principal created
A
apparent authority
16
Q
an assessment of property to determine wither the correct amount of insurance to be written or the amount of loss to be paid
A
appraisal
17
Q
method of claim settlement used when the insured and insurer cannot agree upon the amount of the loss
A
arbitration
18
Q
the transfer of a legal right or interest in an insurance policy. In property and casualty insurance, assignments of policies are usually valid only with the prior written consent of the insurer
A
assignment
19
Q
an insurance company that has qualified and received a Certificate of Authority from the Department on Insurance to transact insurance in the state
A
authorized insurer
20
Q
a land motor vehicle, trailer or semi-trailer designed for use on public roads, including attached machinery or equipment; auto does not include mobile equipment
A
auto
21
Q
a method of dealing with risk by deliberately keeping away from it (e.g. if a person wanted to avoid the risk of being killed in an airplane crash, he/she might choose never to fly in a plane)
A
avoidance
22
Q
a person or entity that has possession of personal property entrusted to him/ her by the owner. For example, a tv repair person that has possession of a customer’s tv would be a bailee
A
bailee
23
Q
the person who receives the proceeds from the insurance policy
A
beneficiary
24
Q
a temporary contract that puts an insurance policy into force before the premium has been paid
A
binder
25
a type of bond that covers losses caused by dishonest employees
blanket bond
26
a single property insurance policy that provides coverage for multiple classes of property at one location, or provides coverage for one or more classes of property at multiple locations
blanket insruance
27
legal liability arising from death or physical trauma to a person as a result of a negligent or purposeful act and omissions by an insured
bodily injury liability
28
an unfair trade practice in which one person refuses to do business with another until he or she agrees to certain conditions
boycott
29
a commercial property form that covers buildings under construction
builder's risk coverage form
30
a commercial property form that covers buildings, and/or their contents
building and personal property coverage form
31
the forced entry into another's premises with felonious intent
burglary
32
the termination of an in-force insurance policy by either the insured or the insurer prior to the expiration date shown in the policy
cancellation
33
a type of insurance that covers losses caused by injury to persons or damage to the property of others
casualty insruance
34
a demand of a person to stop committing an action that is in violation of a provision
cease and desist order
35
a document that authorizes a company to start conducting business and specifies that kind(s) of insurance a company can transact. It is illegal for an insurance company to transact insurance without this certificate
certificate of authority
36
a legal document that indicates that an insurance policy has been issues, and that states both the amounts and types of insurance provided
certificate of insurance
37
a demand made by the insured to cover a loss protected by the insurance policy
claim
38
the practice of computing a price per unit on insurance that applies to all applicants possessing a given set of charactersitics
class rating
39
an unfair trade practice in which an insurer uses physical or mental force to persuade an applicant to buy insurance
coercion
40
an agreement between an insurer and insured in which both parties are expected to pay a certain portion of the potential loss and other expenses
coinsurance
41
a single dollar limit of liability applying to the total damages for bodily injury and property damages combined, resulting from one accident/ occurrence
combined single
42
type of insurance that pertains to business, mercantile or manufacturing establishments
commercial lines
43
the chief executive and administrative officer of a state insurance
commissioner (superintendent, director)
44
an unwritten body of law based on past judicial decisions as well as usages and customs
common law
45
a written statement of a liability claim given by the claimant; a reason for a lawsuit
complaint
46
factors the determine rates, including loss reserves, loss adjusting expenses, operating expenses and profits
components
47
also known as other than collision coverage, it covers losses by fire, theft, vandalism, falling objects, etc.
comprehensive coverage
48
the withholding of known facts, which, if material, can void a contract
concealment
49
a type of an agreement in which both parties must perform certain duties and follow rules of conduct ti make the contract enforceable
conditional contract
50
the section of an insurance policy that indicates the general rules or procedures that the insurer and insured agree to follow under the terms of the policy
conditions
51
the binding force in a contract that requires something of value to be exchanges for the transfer of risk. The consideration on the part of the insured is the representations made in the application and the payment of premium; the consideration on the part of the insurer is the promise to pay in the event of loss
consideration
52
a person who, for a fee, offers any advice, counsel, opinion, or service regarding the benefits, advantages, or disadvantages promised under a policy of insurance
consultant
53
written and/ or oral statements regarding a costumer's credit, character, reputation, or habits collected by a reporting agency from employment records, credit reports, and other public rescources
consumer reports
54
an agreement between two or more parties enforceable by law
contract
55
an entity that obtains and possesses a license solely for the purpose of writing business on the owner, immediate family, relatives, employer and employees
controlled busines
56
multiple events leading to one loss
concurrent causation
57
the amount payable upon the death of a person whose life is insured
death benefit
58
the section of an insurance policy containing the basic underwriting info, such as the insured's name, address, amount of coverage and premiums, and a description of insured locations, as well as an supplemental representations by the insured
declarations
59
the portion of the loss that is to be paid by the insured before any claim benefits may be paid by the insurer
deductible
60
an unfair trade practice in which one agent or insurer makes an injurious statement about another with the intent of harming the persons or company's reputation
defamation
61
a condition that allows the insurer to audit the insured's books or records at the end of the policy term to make sure adequate premium has been collected for the exposure
deposit premium audit
62
the lessening value of real and personal property due to age and wear and tear
depreciation
63
physical damage to buildings and/ or personal property as a result of direct consequence of a particular peril
direct losses
64
the head of the state department of insurance
director( commissioner, superintendent)
65
a physical/ mental impairment, either congenital or resulting from an injury or sickenss
disability
66
an act of identifying the name of the producer, representative or firm, limited insurances representative, or temporary insurance producer on any policy solicitation
disclosure
67
an insurance company that is incorporated in the state
domestic insurer
68
insurer's location of incorporation and the legal ability to write business in a state
domicile of insurer
69
the estimated total cost (both insured and uninsured) of an accident
economic loss
70
a printed addendum to a contract that is used to change the policy's original terms, conditions, or coverages
endorsement
71
a legal impediment to denying a fact or restoring a right that has been previously waived
estoppel
72
a policy that only pays for loss after the primary policy has paid its limit
excess policy
73
causes of loss, exposures, conditions, etc. listed in the policy for which the benefits will not be paid
exculsions
74
an agent who represents only one company and is compensated by commissions
exclusive or captive agent
75
method of determining the premium based on the insured's own past loss experience
experience rating
76
a unit of measure to determine rates charged for insurance coverage
exposure
77
the authority granted to an agent by means of the agent's written contract
express authority
78
a provision in some property policies which allows the extension of a major coverage to certain types of loss to property not specifically insured
extensions of coverage
79
fair access to insurance requirements plan is a state-run program that makes insurance obtainable to those in high risk areas who have been unable to acquire insurance through other channels
FAIR plan
80
an agent/ broker who handles the insurer's funds in a trust capacity
fiduciary
81
the individual whose name appears first on the policy's declaration
first named insured
82
a general and temporary condition of partial or complete inundation of normally dry land areas from overflow of inland or tidal waters of from the unusual and rapid accumulation or runoff of surface waters from any source
flood
83
an insurance company that is incorporated in another state
foreign insurer
84
a life of health insurance company formed to provide insurance for members of an affiliated lodge, religious, or fraternal organization with a representative form of government
fraternal benefit society
85
intentional misrepresentation or deceit with the intent to induce a person to part with something of value
fraud
86
the cost to replace damaged property with less expensive and more modern construction or equipment
functional replacement card
87
reckless behavior that shows disregard for the safety or lives of others
gross negligence
88
a circumstance that increases the likelihood of loss
hazard
89
the effect of a person's reputation, character, living habits, etc. on his/her insurability
hazard, moral
90
the effect of a person's indifference concerning loss had on the risk to be insured
hazard, morale
91
a type of hazard that arises from physical characteristics of an individual, such as a physical disability due to either current circumstance or a condition present at birth
hazard, physical
92
authority that is not expressed or written into the contract, but which the agent is assumed to have in order to transact the business of insurance for the principal
implied authority
93
compensation to the insured that restores them to the same financial position that they enjoyed prior to the loss
indemnity
94
agents that sell the insurance products of several companies and work for themselves or other agents
independent agents
95
losses resulting from a peril, but not directly caused by it. indirect losses may include business disruption, rent insurance, extra expenses, and other consequences that occur over time
indirect losses
96
a coverage extension that automatically increases amounts of insurance, so that damage or destruction of that property would cause the insured financial loss
inflation guard
97
any interest as insured may have property that is the subject of insurance, so that damage or destruction of that property would cause the insured financial loss
insurable interest
98
the transfer of the possibility of a loss (risk) to an insurance company, which in turn spreads the costs of unexpected losses to many individuals
insurance
99
a contract between an insured and an insurance company which agrees to pay the insured for loss caused by specific events
insurance policy
100
the person or organization that is protected by insurance; the party to be indemnified
insured
101
a definition on liability forms that describes the types of contracts in which liability is assumed by the insured and included for coverage in the policy. Examples of insured contracts are leases of premises, elevator maintenance agreements, easement agreements, and other agreements related to the insured's business
insured contract
102
an entity that indemnifies against losses, provides benefits, or renders services (aka the "company" or "insurance company")
insurer
103
the section of an insurance policy containing the insurer's promise to pay, the description of coverage provided and perils insured against
insuring agreement
104
any deliberate act that causes harm to another person
intentional tort
105
a written amendment designed to eliminate redundancy and minimize the number of endorsements in the policy
interline endorsements
106
an approach used when credible statistics are lacking or when the exposure units are so varied that it is impossible to construct a class
judgement rating
107
a principle stating that the larger the number of similar exposure units considered, the more closely the losses reported will equal the underlying probability of loss
law of large numbers
108
a liability under the law that occurs when a person is responsible for injuries or damages to another due to negligence
legal liability
109
responsibility under the law
liability
110
a property insurance clause that extends broader legislated or regulated coverage to current policies, as long s it does not result in a higher premium
liberalization
111
a charge, security or encumbrance on property
lien
112
the maximum amount for which an insurer is liable
limit of liability
113
organizations that provide support facilities for underwriters or groups of individuals that accept insurance risk
Lloyd's associations
114
the reduction, decrease, or disappearance of value of the person or property insured in a policy, by peril insured against
loss
115
a provision in property insurance that is used to cover the interest of a secured lender in personal property
loss payable clause
116
a calculation used by insurance companies to relate income from loss expenses: loss ration = (incurred losses + loss adjusting expense)/ earned premiums
loss ratio
117
a factor in determining the premium charged and the amount of insurance required
loss valuation
118
a seldom used method of valuing a loss based upon the amount a willing buyer would pay to a willing seller for the property prior to the loss
market value
119
a false statement or lie that can render the contract void
misrepresentation
120
a policy written separately as a single coverage
monoline policy
121
a mutual insurance company with the right to assess policyholder's additional amounts of premium to meet operational needs
mutual assessment insurer
122
insurance organizations that have no capital stock, but are owned by the policyholders
mutual companies
123
a disappearance of property that cannot be explained as to the location, tome or the manner of property loss
mysterious disappearance
124
the individual(s) whose name appears on the policy's declaration
names insured
125
the cause of loss specifically covered by the insurance policy. No coverage is provided for unlisted perils
named peril
126
the failure to use the care that a responsible, prudent person would under the same or similar circumstances
negligence
127
a provision that excludes any assignment or granting of any policy provision to any person or organization holding, storing, repairing, or moving insured property for a fee
no benefit to the bailee
128
an insurance company that has not applied, or has applied and been denied a certificate of authority and may not transact insurance
nonadmitted insurer
129
a situation in which other insurance is written on the same risk, but not on the save coverage basis
nonconcurrency
130
a termination of a policy by the insurer on the anniversary or renewal date
nonrenewal
131
a provision that spells out an insured's duty to provide the insurer with reasonable notice in the event of a loss
notice of claim
132
a broader definition of loss, which differs from accident in that it includes losses caused by continuous or repeated exposure to conditions resulting in injury to persons or damage to property that is neither intended nor expected
occurrence
133
term used in property insurance to describe the breadth of coverage provided under an insurance policy from that insures against "any risk of loss" that is not specifically excluded
open peril
134
a clause included in many property and inland marine policies, which provides that the insurer is not obligated to pay for the total value of a set of items if only one item has been lost, damaged, or destroyed
pair and set clause
135
a legal entity in which 2 or more persons agree to share the profits and losses of the businesses
partnership
136
a description of an anti-theft device or system for autos which is activated automatically when the driver turns the ignition key to the off position and the key is removed
passive
137
the cause of possible loss
peril
138
legal responsibility for an injury to the character of another person caused by libel, slander, false arrest, invasion of privacy and other acts
personal injury liability
139
type of coverage available to individuals ad families for non-business risks
personal lines insurance
140
the maximum amount an insured may collect, or for which an insured is protected under the terms of the policy
policy limits
141
a period of time a policy is in effect (aka policy term)
policy period
142
the person in possession of an insurance policy; may or may not be the policy-owner and/ or insured
policyholder
143
the person who is entitled to exercise the rights and privileges in the policy. This person may or may not be the insured
policyowner
144
a periodic payment to the insurance company to keep the policy in force
premium
145
a basic, fundamental insurance policy which pays first with respect to other outstanding policies
primary policy
146
proportional distribution of shares of the loss for each insurance policy written on a piece of property
pro rata
147
a person who acts on behalf of the insurer to sell, negotiate, or effect insurance contracts; aka an agent
producer
148
a sworn statement that must usually be furnished by the insured to an insurer before any loss under a policy can be paid
proof of loss
149
legal liability arising from physical damage to tangible property of others caused by the negligence of an insured
property damage liability
150
an act or event that is the immediate or actual cause of a loss
proximate casue
151
situations that can only result in a loss or no change; a gain is never possible. pure risk is the only type insurance companies are willing to accept
pure risk
152
any inducement offered in the sale of insurance products that is not specified in the policy
rebating
153
insurance resulting from an interchange of reciprocal agreements of indemnity among persons known as subscribers
reciprocal
154
lessening the possibility or severity of a loss
reduction
155
a form of insurance whereby one insurance company (the re-insurer) in consideration of a premium paid to it, agrees to indemnify another insurance company (the ceding company) for part of all its liabilities from insurance policies it has issued
reinsurance
156
the cost to replace damaged property with like kind and quality at current price, without any deduction for depriciation
replacement card
157
statements made by the applicant on the insurance application that are believed to be true, but are not guaranteed to be true
representations
158
a method of dealing with risk by intentionally or unintentionally keeping a portion of it for the insured's account; the amount of responsibility assumed but not re-insured by the insurance company
retention
159
a self-rating plan under which the actual losses during the policy period determine the final premium (subject to a minimum and maximum premium)
retrospective rating
160
a provision in property insurance policy requiring that after payment of a total loss to insured property, the insured must transfer the title (or ownership) to the property to the insurer
right of salvage
161
uncertainty as to the outcome of an event when two or more possibilities exist
risk
162
the uncertainty or chance of a loss occurring in a situation that can only result in a loss or no change
risk, pure
163
the uncertainty of change of a loss occurring in a situation that involves the opportunity for either loss or gain
risk, speculative
164
the taking of property from another by using violence or the threat of violence
robbery
165
the amount of money realized from the sale of damaged merchandise pr property. a salvage clause is found in ocean marine insurance and usually states that the rescuers of a ship are entitled to the salvage of the ship and cargo
salvage
166
the process by which an agreement is reached and a claim is resolved in liability insurance
settlement
167
a provision that insurance applies separately to each insured in a policy, treating each individual as the only insured
severability of interests
168
a method of dealing with risk for a group of individual persons or businesses with the same or similar exposure to loss who share the losses that occur within that group
sharing
169
a property insurance policy that covers a specific kind or unit of property for a specific amount of insurance
specific insurance
170
the uncertainty or chance of a loss occurring in a situation that involves the opportunity for either loss or gain
speculative risk
171
separately stated limits of liability for different overages, which many be stated on a per person, per occurrence, per policy period basis, or can be divided between bodily injury and property damage
split
172
an amount of insurance scheduled in a property policy which is not subject to any coinsurance requirements in the event of a covered loss
stated amount
173
the written law as enacted by a legislative body (i.e. the laws of the state), which generally takes precedence in cases where both common law and statute law apply
statute law
174
companies owned by the stockholders whose investments provide the capital necessary to establish and operate the insurance company
stock companies
175
a liability that refers to damages caused by defective products even though the manufacturer's fault of negligence cannot be proven
strict liabiltiy
176
the acquisition by an insurer if an insured's rights against any third parts for indemnification of loss or other payment, to the extent that the insurer pays the loss
subrogation
177
a guarantee that debts and obligations will be carried out and the benefits will be paid for losses caused by nonperformance
surety bond
178
insurance for which there is no readily available, admitted market
surplus lines
179
any act of stealing or removing property from its rightful owner. theft encompasses both burglary and robbery
theft
180
insurance provisions that address the rights if someone other than the policyowner to have a secured financial interest in the insured property
third-party provision
181
a wrongful act or the violation of someone's rights that leads to legal liability. torts are classified as intentional or unintentional (referred to as negligence)
tort
182
a basic principle of insurance under which the risk of financial loss is assigned to another party
transfer
183
a form of misrepresentation in winch and agent persuades an insured/ owner to cancel. lapse, or switch policies, even when it's to the insured's disadvantage
twisitng
184
coverage that provides extra protection against liability, and excess amount of insurance above the primary policy
umbrella liability policy
185
an insurance company that has not applied, or has applied and been denied a certificate of authority
unauthorized insurer
186
a person who evaluates and classifies risks to accept/ reject them on behalf of the insurer
underwriter
187
the process or reviewing, accepting or rejecting application for insurance
underwriting
188
a contract that legally binds only one party to contractual obligations after the premium is paid
unilateral contract
189
coverage in an automobile insurance policy under which the insurer will pay costs up to a specified limit for bodily injury, if the liable driver's policy limits are exhausted and he/she cannot pay the full amount for which he/she is liable
under-insured motorist coverage
190
coverage that allows the named insured, resident relative(s) and passengers in a covered auto to collect sums another driver would be legally liable to pay for bodily injury resulting from an auto accident, providing the accident was caused by an uninsured motorist, a hit-and-run driver or a driver whose insurance company is insolvent
uninsured motorist coverage
191
the result of acting without proper care, generally referred to as negligence
unintentional tort
192
a property that has content or furnishings in it, but us not being used or lived it
unoccupied
193
the fair and equal bargaining by both parties in forming the contract, where the applicant must make full disclosure of risk to the company and the insurance company must be fair in underwriting the risk
utmost good faith
194
a property that has no contents furnishings or occupants
vacant
195
a policy used when it is difficult to establish the actual cash value of insured property after a loss occurs because of its rarity or uniqueness. a valued policy provides for payment of the full policy amount in the event of a total loss without regard to actual value of depreciation
valued policy
196
a type of liability in which one person is responsible for the acts or another. for example, employers may be vicariously liable for the actions of their employees and parents may be help responsible for negligent acts of their children
vicarious liability
197
time between the beginning of a disability and the start of disability insurance benefits
waiting period
198
the voluntary abandonment of a known or legal right or advantage
waiver
199
a material stipulation in the policy that if breached may void coverage
warranty
200
benefits required by state law top be paid to an employee by an employer in the case of injury, disability or death as the result of an on-the-job hazard
workers compensation
