Property and Casualty Insurance Provisions

Flashcards for key vocabulary related to property and casualty insurance, based on lecture notes.

Additional Insured

A third party who is usually added to a commercial policy because they also have the potential to suffer a loss.

Aggregate Limit

The total amount a policy will pay for all covered losses in a given policy period, regardless of the number of claims or claimants.

Agreed Value

Coverage based on the value of the property agreed upon by the insured and insurer, often determined by appraisal. The insurer pays this amount in case of a total loss.

Assignment

The transfer of rights or duties from the insured to another party, which is generally prohibited in property contracts without the insurer's written permission.

Cancellation

The termination of a policy before its end date, initiated by either the insured or the insurer, subject to advance written notice requirements.

Claim Settlement Options

Options available to the insurer to settle a property claim, such as repairing, replacing, or providing property of equivalent value.

Combined Single Limit

A total policy limit per occurrence that covers both bodily injury (including death) and property damage with no separate category limits.

Declarations

The face page of an insurance policy that specifies the unique contractual relationship between the insured and the insurer, also known as the information or deck page.

Deductible

The amount the insured pays on a claim before the insurer pays the remaining loss amount.

Endorsements

Written additions or changes to an existing insurance contract that modify the policy terms, coverages, or conditions.

First Named Insured

The party the insurance company recognizes and deals with under a commercial policy, even if other insureds are listed.

Functional Replacement Cost (FRC)

The cost to repair or replace damaged property using common, less expensive building materials when original materials are obsolete or cost-prohibitive.

Insured

An individual or legal entity whose interests are covered against loss from perils named or not excluded in the insurance contract.

Insuring Agreement (Clause)

The section of an insurance policy that outlines the insurer's obligations and promises to the insured in the event of a covered loss, also stating the perils covered.

Inventory the Loss

Compiling a complete list of destroyed, damaged, and undamaged property after a loss.

Liberalization Clause

Protects the insured by providing broadened coverage at no additional premium if the insurer amends the policy and broadens coverage within a specified time frame.

Loss Payable Clause

Allows the insurer to pay a loss to a third party with an insurable interest in the insured property.

Market Value

The price a property will sell for in the regular marketplace, including land value.

Named Insureds

Individuals or legal entities whose interests are covered against loss from covered perils as stated in the contract's declarations page.

Non Concurrency

Occurs when umbrella and underlying policies cover the same loss exposure but have different start and expiration dates or other differing conditions.

Non Renewal

The insurance company's decision not to renew a policy at the end of its term.

Per Occurrence Limit

The maximum amount a policy will pay for any single claim or cause of loss.

Per Person Limit

The maximum amount a policy will pay to one person for bodily injury or death.

Policy Period

The duration of coverage, typically one year, as stated in the policy declarations.

Policy Territory

The geographical limits within which the policy provides coverage.

Primary and Excess

A situation where two policies cover the same loss exposures, one providing primary coverage and the other providing excess or secondary coverage.

Proof of Loss

A written and signed form submitted by the insured to the insurer, detailing the loss event and amount of claimed damages.

Split Limits

Liability limits expressing separate limits for specified loss categories, like per person, per occurrence, and property damage.

Standard Mortgage Clause

A policy provision that protects the interests of the mortgagee when a loan is made.

Stated Value

The value of insured property declared by the property owner, without any formal agreement from the insurer for that value in the event of a claim.

Subrogation

The right of an insurance company to recover from a third party who caused a covered loss to the insured.

Supplementary Payments

Payments made in addition to the policy's liability limits, often found in CGL and auto policies.

Valued Policy

A policy where the insurer is legally required to pay the full value stated in the policy declarations in the event of a total loss, even if the actual cash value is less.

Waiver of Rights

An endorsement that waives the insurer's right to seek subrogation in the event a third party causes loss to the insured.