Property and Casualty Insurance Practice Flashcards

Vocabulary terms and definitions based on property, casualty, auto, and homeowners insurance lecture notes.

Declaration Page

The part of the policy that lists the perils, parties, period, and amount of insurance.

Definitions

The section of the policy that explains and defines specific terms used throughout the document.

Insuring Agreement

The insurer's promise to pay; the section where the insurance company agrees to pay for losses and defend the insured.

Additional or Supplementary Coverages

Minor coverages, such as trees and plants, that are included with no extra cost ($0$).

Conditions

The section outlining rules, duties, obligations, and ways of behaving for the parties involved.

Exclusions

Parts of the policy that specify what is not covered, such as earth movement and water damage.

Endorsement

Written changes or extra coverages added to a policy for an additional cost ($$).

Field Underwriter

The agent or person who gathers data to begin the risk selection process.

Company Underwriter

The individual who looks at data and consumer reports to determine how risky an applicant is and whether to issue a policy.

Property Insurance

Insurance that covers "my stuff."

Casualty Insurance

Insurance that covers "other people stuff."

Absolute Liability

Liability for things that are absolutely dangerous, such as a swimming pool or a pet tiger.

Vicarious Liability

When one party is responsible for another, such as a parent being responsible for a child.

Strict Liability

Liability related strictly to products, such as a faulty tire.

Burglary

The act of breaking in.

Robbery

The act of stealing from a person through threats.

Theft

The general act of stealing.

Stock Holder

An owner of a stock company; they receive taxable dividends which are a return of unused premium.

Mutual Policy Owner

An owner in a mutual insurance company who participates in non-participating policies.

Vacant

A property with no people and no stuff; coverage may be lost after $60$ days.

Unoccupied

A property with no people but where the stuff remains, such as when on vacation.

Warranty

A statement that must be true.

Representation

A statement on the application believed to be true to the best of one's knowledge.

Fraud

The act of cheating or deceiving.

Concealment

The act of withholding or hiding information.

Perils

The cause of loss, such as fire, wind, lightning, or hail.

Hazard

A condition that increases the chance of a loss; it leads to a peril.

Agreement

An element of a contract consisting of an Offer + Acceptance.

Consideration

The value brought to a contract, including the application, premium, and promise.

Competent Parties

Parties who are old enough and not under the influence of drugs; noted as "no drugs (fellum)."

Legal Purpose

A contract requirement that it cannot break the law.

Pure Risk

A type of risk involving only the uncertainty of loss or nothing, with no chance of gain.

Speculative Risk

A type of risk involving the chance to lose or win, such as gambling.

Material Misrepresentation

A false statement where a different decision would have been made if the truth were known.

Deductible

A device used to minimize small claims and lower insurance premiums.

Subrogation

The process where the insurance company goes after the third party responsible for a loss.

WHARVES

An acronym for Extended Coverage perils: Wind, Hail, Aircraft, Riot, Vehicle, Explosion, and Smoke.

DP1 (Basics)

A dwelling policy covering Fire, Lightning, and Internal Explosion.

HO-4

A renters insurance policy that covers personal property (contents) and personal liability but does not cover the building.

HO-6

A condo owner policy that covers upgrades and personal property.

HO-8

A modified homeowners policy for older houses involving market value and limited theft coverage ($1000$ limit).

Collision Coverage

Auto insurance coverage for when you hit an object like a tree or a sign.

Other Than Collision

Auto insurance coverage for mother nature, animals, theft, or flood; also known as Comprehensive.

Split Limits

Auto liability limits expressed as three numbers, such as $25/50/25$, representing BI per person, total BI per accident, and PD.

Combined Single Limit

A liability limit with no per-person limitation, just a total limit such as $300K$.