Chapter 1: Property Insurance Terms and Related Concepts - Introduction

Depreciation

reduction in value, particularly due to wear and tear

Exposure

susceptibility to risk

Implied warranty

a legal term meaning that a product is suitable for its intended purpose and that it fits an ordinary buyer’s expectations

Insurance Policy

a contract between a policyowner (and/or insured) and an insurance company which agrees to pay the insured or the beneficiary for loss caused by specific events

Insurer (principal)

the company who issues an insurance policy

Obsolescence

depreciation in the value of a property due to becoming outdated

Premium

the money paid to the insurance company for the insurance policy

Tort

a wrongful act or the violation of someone’s rights that leads to legal liability.