Property and Liability Insurance Principles Chp 9

studentdavid's version from 2017-01-04 22:51

Section 1

Question Answer
Valid ContractA contract that meets all of the requirements to be enforcable
ConsiderationParties exchange something of value and form a contract
Principle of IndemnityRule that obligates insurance policies to never exceed the amount of the loss suffered by an insured
Valid PolicyPolicy that limits insurer to pay only the amount stated in the policy for specified losses, regardless of actual value of the loss
ConcealmentTo purposely hold important information

Section 2

Question Answer
Material FactTrue information that affects the insurer's decision to provide or maintain insurance or to settle a claim
Conditional ContractA contract that one or more parties must perform only under certain conditions
Preprinted FormStandard form that meets the needs of many policyholders
Manuscript FormAn insurance form that is drafted according to terms negotiated between a specific insured and an insurer
Coverage PartA component of a CPP or a monoline policy that contains the policy terms relating to a specific line of business. ex. commercial property
Monoline PolicyAny single line policy coverage

Section 3

Question Answer
Declarations PageInformation pages of insurance policy providing details about the insured and the subject of insurance
EndorsementA document that changes an insurance policy
Policy ProvisionAny phrase/clause describing the policy's coverages, exclusions, limits, conditions, or other features
Scheduled CoverageInsurance for property specifically listed on a policy, with a limit of liability for each item ex. jewelry, artwork, etc.
Insuring agreementInsurer promises to compensate insured for future losses and insured promises to pay a premium

Section 4

Question Answer
ConditionCircumstance that makes insurance contract become enforceable.
ExclusionA policy provision that eliminates coverage for specified exposures
FloaterA policy designed to cover property that floats, or moves, from location to location
Named PerilA specific cause of loss listed and described in an insurance policy
Special FormA policy providing coverage for any source of loss not specifically excluded

Section 5

Question Answer
Collision CoverageCoverage for direct and accidental loss or damage to a covered auto caused by collision with another object or by overturn
(Comprehensive coverage)Other than collision coverageCoverage for physical damage to a covered auto resulting from any cause of loss except collision or a cause of loss specifically excluded
Specified causes of loss coverageCovers direct and accidental losses specifically stated on policy. Specific perils include flood, fire, vandalism, sinking, etc.
Direct LossProperty loss causing reduction in property value due to direct damage to property ex. fire, hail, earthquake
Time element loss ( Indirect Loss )A loss that arises as a result of damage to property and loss severity increases over time

Section 6

Question Answer
Net IncomeThe difference between revenues and expenses
Extra expensesExpenses, in addition to ordinary expenses, that an organization incurs to relieve the effects of a business interruption
Additional living expenseA coverage in homeowners policies that indemnifies the insured for the additional expenses that are incurred following a covered property loss so that the household can maintain its normal standard of living while the dwelling is being restored
Named InsuredA person, corporation, partnership, or other entity identified as an insured party in an insurance policy's declarations page
Loss payeeA party entitled to share in whatever loss payment an insured receives

Section 7

Question Answer
DeductibleA portion of a covered loss that is not paid by the insurer
Insurance-to-value provisionAn insurers provision that encourages insured to buy insurance that insures a high percentage of the property's value
CoinsuranceAn insurance-to-value provision that allows the insurer to pay a reduced amount for a covered loss if the property is underinsured.
Bodily InjuryPhysical Injury to a person, including sickness, disease, and death
Property damagePhysical injury to, destruction of, or loss of use of tangible property
Personal InjuryInjury other than bodily injury, arising from intentional torts ex. libel, slander, or invasion of privacy

Section 8

Question Answer
ReleaseA binding contract that obligates disputing parties to fulfill their agreement before being released from contract
Supplementary PaymentVarious expenses the insurer agrees to pay under a liability insurance policy. Expense examples include premiums on bail bonds and appeal bonds, loss of insured's earnings due to trial attendance
Prejudgment InterestInterest that may accrue on damages before a judgment has taken place
Postjudgment interestInterest that may accrue on damages after a judgment has been entered in a court and before the money is paid
Medical payments coverageCoverage paid for by the insured or claimant which covers an individuals medical expenses within a specified period of time and regardless of fault

Section 9

Question Answer
Occurrence basis CoverageCoverage activated by a recently occurring current event of bodily injury or property damage during the policy period
Claims-made coverage formA coverage form that provides coverage for bodily injury or property damage that is claimed during the policy period
Retroactive dateOnly provides coverage for bodily injury or property damage if the injury or damage occurs on or after a specified date
Appeal BondIn order to prevent unnecessary retrials, the court requires the plaintiff to offer a specific amount of money while the retrial is being decided
Bail BondA written promise paid for by insurer to give bail to defendant(prisoner) and requires defendant to be at court at a specified time and date

Section 10

Question Answer
Each person limitThe maximum amount an insurer will pay for injury to any one person for a covered loss
Aggregate limitThe maximum amount an insurer will pay for all covered losses during the covered policy period
Each occurrence limitMaximum amount the insurance company will pay for all covered losses resulting from a single recently occurring event
Split limitsProvides separate limits of coverage for bodily injury and property damage liability coverage
Single limitProvides a single limit of coverage for both property damage and bodily injury regardless of the fact they are two different types of loss exposures

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