Term
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Definition
| State the perils that are to be insured against. |
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Term
| NAMED PERIL VS. OPEN PERIL |
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Definition
| A named peril form lists the specific perils to be covered in the policy.The open peril form does not list the perils but provides broader coverage.This means that all perils are covered except the perils listed in the Exclusions section of the policy. |
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Term
| BASIC TYPES OF CONSTRUCTION |
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Definition
| Refers frame, masonry, metal, brick veneer, fire resistive, etc. |
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Term
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Definition
| These methods are used to determine the value of the loss. |
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Term
| DEFINITION OF AN INSURED (3) |
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Definition
| 1Those that have an insurable interest in the property who would suffer a financial loss if the property were damaged.2Can include family members without listing their names on the declarations page of the policy.3Additional insureds such as a lien holder. |
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Term
| BASIS FOR INSURING PROPERTY (3) |
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Definition
| 1Specific Basis-A separate limit per insured item Ex.a separate limit on the building and/or one for the contents.2Blanket basis-One limit that applies to both building and contents.usually more than one location.3Reporting Form-Allows the insured to report values to the company of the insured contents.Usually monthly. |
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Term
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Definition
In commercial property insurance the coinsurance clause is a method of requiring the insured to insure at least 80% of the value of the property in exchange for a premium discount.
Here's how it works:
Let's say you have a building that you believe would cost $100,000 to replace and a coinsurance penalty in your policy of 80 percent. You insure the building for $80,000 thinking you have fulfilled the coinsurance clause. A fire loss causes $60,000 worth of damage so you submit a claim. Your insurance company subsequently determines that the replacement cost of the building is actually $150,000.
To determine how much to pay on the claim, the insurer divides the amount of insurance you purchased ($80,000) by the amount you should have purchased (80% of $150,000 or $120,000). The result (two-thirds, or $40,000) is the amount of your claim the insurer will pay. |
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Term
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Definition
| Found in personal lines property insurance.similar to the coinsurance clause that requires insured to insure at least 80% of the value of the property. |
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Term
| THIRD PARTY PROVISIONS (3) |
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Definition
| 1Standard mortgage clause-protects the interest of the financial institution against loss or real property caused by perils insured against loss to real property caused by perils insured against.2Loss payable clause-Similar to the Standard mortgage clause but applies to chattel property.3No benefit to bailee-ex.if the insured's property were destroyed by fire while at the dry cleaners, the insurance company would only protect the insured. |
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Term
| LIABILITY LOSSES (THIRD PARTY LOSSES) |
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Definition
| Occurs when a person or entity is determined to have been responsible, or legally liable, for injury or loss to another person or liable for damage to another's property and the law requires them to make financial restitution. |
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Term
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Definition
| Occurs when the damage to repair exceeds the value of the vehicle after repairs have been made.Applies to other types of property losses. |
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Term
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Definition
| Defined as the lack of reasonable care that is required to protect others and/or their property from the unreasonable chance of harm. This could also be a failure to act or not to act as a reasonable person under the same set of circumstances. |
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Term
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Definition
| A civil wrong that violates the rights of others. |
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Term
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Definition
| Casualty policies cover bodily injury and property damage caused by the insured as a result of his/her negligence. |
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Term
| COMPENSATORY DAMAGE CATEGORIES (2) |
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Definition
| 1Special damages-Type of compensatory damages the injured party receives for direct and specific expenses involved in the loss, such as medical expenses and loss of wages.pay for "economic losses"2General Damages-Type of compensatory damages that reimburse the injured party for such things as pain and suffering and disfigurement, and life altering issues such as loss of mobility and loss of consortium not readily defined by actual incurred expenses."non-economic losses) |
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Term
| PUNITIVE DAMAGES (EXEMPLARY DAMAGES) |
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Definition
| Money awarded by the court and intended to punish the defendant. |
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Term
| DEFENSES AGAINST NEGLIGENCE (5) |
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Definition
| 1Contributory Negligence-states that if an individual contributes to his or her own loss in any way, then another cannot be held liable for the loss.2Comparative Negligence-Allows an injured party to collect from another party for a loss, even when the injured party contributed to his or her own loss(used in most states).3Assumption of Risk-When a person knowingly exposes himself or herself to danger or injury.4Intervening Cause-Action that breaks the chain of causation and sets in motion a new chain of events. When this occurs, the intervening cause becomes the proximate cause of loss.5Statute of limitations-States have enacted laws as to when certain types of lawsuits must be filed. |
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Term
| ABSOLUTE LIABILITY (STRICT LIABILITY) |
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Definition
| Imposed by law on those participating in certain activities that are considered especially hazardous. frequently applies to activities involving Dangerous materials, Hazardous operations, Dangerous animals. |
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Term
| VICARIOUS LIABILITY (IMPUTED LIABILITY) |
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Definition
| When a person is held responsible for the negligent acts of another person. Employer, employee. |
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Term
| LIABILITY POLICY LIMITS (3) |
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Definition
| 1The single limit-Pays a single amount as the maximum liability of the insurer with respect to any one accident occurrence.2Split limits-There may be a limit representing the maximum payable for each person injured per occurrence for bodily injury and another limit applicable to the claims of all persons injured in the accident or occurrence.3The aggregate limit-represents the total amount for all claims paid during the policy period.Once the aggregate(or amount) has been met the insured is without coverage. |
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Term
| PARTS OF A LIABILITY CONTRACT (7) |
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Definition
| 1Insuring agreement-Outlines the promises made by the insurance company to the insured.All will contain a duty to defend the insured.2Exclusions-Exposures for which the insurer is unwilling to provide coverage.3Definitions-Clarifies the terms used throughout the policy.4Conditions-Outline the duties of each party in case of a loss as well as other items that require clarification.5Policy Period-Policy applies only to accidents and losses which occur during the policy period as shown in the declarations.6Coverage Territory-Identifies where the coverage applies.7Cancellation and Non renewal-cancellation occurs before a policy has expired and a non renewal notice is sent prior to the expiration date of the policy advising the insured that the policy will not be renewed. |
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