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the larger the number of people with a similar exposure to loss, the more predictable actual losses will be.
(forms prediction upon which insurance rates are calculated) |
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| uncertainty or chance of loss occurring |
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situations resulting in a loss or no change, no opportunities for financial gain.
ONLY TYPE INSURANCE COMPANIES ARE WILLING TO ACCEPT |
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opportunity for either loss or gain, like gambling.
NOT INSURABLE |
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conditions or situations that increase the probablility of an insured loss occuring.
ex: slippery floors, congested traffic |
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| arising from the material, structural, or operational features of the risk, apart from the persons owning or managing it. |
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| those applicants that may lie on an application for insurance, or in the past, have submited fraudlent claims against an insurer. |
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an increase in teh hazard presented by a risk, arising rom the insured's indifference to loss b/c of the existence of insurance.
ex: I'm not going to bother fixing this.. if it breaks my insurance will pay to replace it. |
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| coverage provided under an insurance policy form that lists specific covered perils. No coverage is provided for unlisted perils. |
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| coverage provided under an insurance policy form that insures against any risk of loss that is not specifically excluded. |
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| consequential losses, usually result from the time it takes to repair or replace damaged property. (result of a direct loss) |
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| direct, physical damage to buildings and/or personal property. |
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recognizes the reduction of value of property as it ages and becomes subject to wear and tear and obsolescence.
current replacement cost - depreciation = __ |
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| cost to replace damaged property with like kind and quality at today's price, without any deduction for depreciation. |
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seldom-used method of valuing a loss based upon the amount a willing buyer would like to pay for the property prior to the loss.
(takes into consideration the value of the land and location, rather than just the cost of rebuilding the structure itself.) |
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amount of insurance scheduled in a propery policy that is not subject to any coinsurance requirements in the event of a covered loss.
(maximum amount the insurer will pay in the event of a loss.) |
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the estimated value an asset will realize upon its sale at the end of its useful life.
(car may be beyond repair as a complete automobile, but some parts may be salvageable and sold.) |
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| act or event considered a natural and reasonably foreseeable cause of the damage or event that occurs and damages propery or injures a plaintiff. |
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| negligence is the cause without which the accident would not have happened |
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| indemnity (reimbursement) |
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Definition
provision in an insurance policy that states that in the event of loss, an insured or beneficiary is permitted to collect only to the extent of the financial loss and is not allowed to gain finacially because of the existence of an insurance contract.
(purpose is for the insurance is to restore, not let an insured or a beneficiary profit from the loss.) |
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| insurer's liablility for payment as stated in an insurance policy |
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| sublimit in a liability policy that puts a ceiling on the payment for all claims that arise from a single accident/occurance. |
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| maximum amount available for payment of a bodily injury to a single person in an accident, regardless of the policy limit stated in the policy for bodily injury claims. |
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| maximum limit of coverage available under a liability policy during a policy year, regardles of the number of claims made or the number of accidents that occur. |
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separately stated limits of liability for different coverages. (per person, per occurence, or per policy period basis, or can be split between bodily injury and property damage.)
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| indicates the policy would pay up to $25,000 for the injury of a single person; up to $50,000 for bodily injury to two or more people (but not more than the $25,000 to any one person); and up to $25,000 for damage to property of others. |
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| single dollar limit of liability applying to the total of damages for bodily injury and property damage combined, resulting from one accident or occurrence. (may be used in any combination of amounts, not to exceed the single limit.) |
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in consideration of a reduced rate, the insured agrees to maintain a certain amount of insurance on the insured property.
(insurance carried/insurance required) X loss amount = loss |
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| usually found in homeowners policies, provides a replacement cost settlement to the policyholder who carries adequate insurance, which means that the property is insured to the exact dollar amount or percentage of value. |
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dollar amount an insured must pay on a claim before the insurance policy provides coverage.
usually the higher the deductible, the lower the premium. |
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| sudden, unplanned and unexpected event, not under the control of the insued, resulting in injury or damage that is neither expected nor intended |
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| includes those losses caused by continuous or repeated exposure to conditions resulting in injury to persons or damage to property that is neither intended nor expected. |
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| termination of an in-force insurance policy, by either the insured or the insurer, prior to the expiration date in the policy. the termination may be voluntary, involuntary, or in mutual accordance with provisioins contained in the policy. |
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Definition
| the termination of an insurance policy at its expiration date by not offering a continuation of the existing policy or a replacement policy. |
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refers to an insured structure in which no people have been living or working, and no property has been stored for the period of time required as stated in the policy (usually 60 days).
ex: if the insured were to move |
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| unoccupancy (nonoccupancy) |
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Definition
refers to an insured structure in which no people have been living or working within the required amount of time, but some property is stored.
ex: if the insured went on vacation for two weeks. |
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| imposed on defendants engaged in hazardous activities, such as harboring wild animals, using explosives, etc. The injured party does not need to prove negligence. |
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| a person or business that manufactures or sells a product makes an implied warranty that the product is safe. The business is then liable for defective products, regardless of fault or negligence. If the product causes injury and the claimant can prove the defect, the defendant will be stricly liable for the damage. |
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the purpose of this doctrine is to transfer the liability for one person to another person who would probably have a greater ability to pay.
ex: parents may be held liable for negligent acts of the children and employers liable for the acts of their employees. |
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| failure to use the care that a reasonable, prudent person would have taken under the same or similar circumstances. |
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| a temporary contract of insurance issued by an insurer or its agent that places insurance in effect prior to the policy being issued. |
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| printed addendums to a contract that are used to change the policy's original terms, conditions, or coverages. Must be in writing, attached to the policy and signed by an executive officer of the insurer. May be used to add or delete coverage, or to correct items such as the insured name, address, etc. |
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| medical payments (MedPay) |
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Definition
| covers medical costs due to injury on a no-fault basis. No requirement for the insured to be legally liable, only that the injury is a result of the insured's activities or an insured location. (NOT to be confused with liability cov, which protects the insured from lawsuits or damages due to negligence.) |
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Term
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Definition
| single property insurance policy that provides coverage for multiple classes of property at one location, or for one or more classes of property at multiple locations. All insured properties are written for one total amount of insurance, and no single insured item is assigned a specific amount of insurance. However, different amounts may be shown for buildings in general, equipment in general, and other items. |
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| a property insurance policy that covers a specific kind or unit of property for a specific amount of insurance. |
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| the forced entry into another's premises with felonious intent. this insurance provides coverage for property taken or destroyed by breaking into and entering into an insured's premises. the break-in must be make with felonious intent and visible signs of forced entry should be present in order for the policy to pay. |
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| the taking of property from another by using violence or the threat of violence. |
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| any act of stealing or removing property from its rightful owner. encompasses both burglary and robbery. |
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| the disappearance of property without knowledge as to the location, time or how the property was lost. losses by this event are excluded from most insurance policies. |
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