Insurance

These flashcards cover essential vocabulary and key concepts related to insurance, including types of insurance, contract definitions, and important terms in the context of insurance practices.

Insurance

A contract where a person pays a premium for financial protection against potential loss, damage, or liability.

Suretyship

A contract where the surety pays if the debtor fails; involves a creditor, debtor, and surety, with the surety being equally liable.

Risk-Distributing Device

A method by which insurance spreads the risk of loss among many people, with all insured paying small premiums.

Contract of Adhesion

A contract prepared by the insurance company with terms that cannot be changed or negotiated by the insured.

Aleatory Contract

A contract that depends on an uncertain event which may or may not happen.

Contract of Indemnity

A type of insurance contract allowing the insured to recover only actual losses.

Contract of Utmost Good Faith

An insurance contract that requires full disclosure of material facts by the applicant.

Personal Contract

An insurance policy that is personal to the insured and generally not transferable.

Insurable Interest

The insured must have a legitimate interest in the safety or preservation of the insured property.

Microinsurance

An insurance product aimed at low-income individuals with small premiums and limited benefits.

Marine Insurance

Insurance covering risks associated with ships, aircraft, vehicles, and goods during transport.

Fire Insurance

Insurance that covers loss due to fire and may include related events such as lightning or tornado.

Casualty Insurance

Insurance covering loss or liability from accidents, excluding losses covered by other insurance types.

Claims Settlement

The process of resolving a claim made by the insured, which includes proof of loss and agreements.

Subrogation

The legal right of an insurer to pursue a third party that caused an insurance loss to the insured.

Breach of Warranty

Violation of a warranty in an insurance policy that allows the other party to rescind the contract.

Nonpayment of Premium

A ground for rescission of an insurance contract due to failure to pay the required premium.