key terms

ribo terms

agent

person authorized to rep the insurer when dealing with 3rd parties

baliee for hire

someone who has temp possession of property of others for purpose other than sale and is compensated

binder

agreement giving the insured temporary insurance protection pending the issuance of the actual policy

bodily injury

bodily injury, sickness or disease (includes death)

broker

independent middle man who reps clients in helping them secure insurance from insurance companies/their agents

burglary

unlawful taking of property by someone who entered or exited the premises with evidence of forcible entry or exit (must have signs of force)

commission

compensation paid to broker for placing business with an insurer

condition

a requirement to do or not to do something (imposed by insurer on the insured)

condominium

units in a multi-unit building thats owned separately

consideration

an exchange of something of value

contract

an agreement that is enforceable by law

damages

damages awarded to a person injured by a tort

deductible

amount the insured must pay before they are entitled to indemnity from the insurer (fixed dollar amnt or percentage of insured values)

disability

physical or mental inability to do work

domestic water container

apparatus for personal use for holding, heating, cooling or dispensing water

dwelling

building occupied as a private residence

endorsement

changes in terms of the contract

ethics

related to moral character and whether the person conforms to professional standards of conduct

exclusions

occurrences or persons not covered by the policy

fiduciary

one who manages money or property for another

fire

ignition resulting in destructive burning

floater

insurance meant to cover mobile property

forthwith

immediately (no delay)

fraud

a deliberate deception with the intent to secure a benefit

friendly fire

fire that is contained (ex, camp fire)

ground water

water in underground soil (ex, well water, underground stream, etc)

hazard

a condition that might cause a peril to occur

head of household

the one who earned the most money in the last year

hold harmless

a contract where 1 party assumes the legal responsibility of someone else

hostile fire

a fire that is uncontained, uncontrollable and becomes hostile or destructive

indemnity

the principle of indemnity states that the victim will be compensated the actual amount of loss sustained (no more, no less)

insurable interest

someone who has insurable interest if they would suffer financially from a loss

insurance

an undertaking by one person to indemnify another against loss or liability when certain risk/peril damages an object of insurance (or to compensate someone if some event occurs)

loading

an additional rate charged on top of the fire rate providing coverage

material change

a change, taking place after policy issuance, that increases chance of loss

material fact

a fact that would have change the insurance companies decision if they knew about it (ex, decline, charge more or add conditions)

minimum retained premium

min amnt of premium kept by inusrer if the policy is cancelled midterm

negligence

failure to use the degree of care of a reasonable and prudent person given the circumstances

partial loss

a loss which does not completely destroy or render the property worthless or one that does not use up the applicable limit of insurance

payee

someone insurance would pay in the event of a loss to insured property

peril

cause of a loss

premises

land within the lot lines

premium

money paid to insurer for insurance protection

private protection

things done by the insured to prevent or reduce loss

property damage

physical injury to tangible property including loss of use or loss of use of tangible property not physically injured

public protection

protection provided by outside sources (ex, proximity to a fire hydrant)

pure risk

risk of financial loss with no chance of gain

rebate

discounting of premiums used by agents/brokers to induce the client to purchase from them

relative

someone connected by blood or family connection

repair

to restore a damaged object/building to its original condition

replacement cost

cost to replace or repair the property (whichever is less) on the same site with materials of same kind/quality for the job

retention

paying for losses yourself (out of pocket)

rider

adds coverage to a policy

risk

the chance of financial loss an object of insurance is exposed to

risk control

risk management technique of trying to reduce the frequency and severity of losses

robbery

criminal taking of property from another against their will using force or fear

subrogation

the ability of an insurer to step into the shoes of the insured, after paying compensation, and assume their legal rights to sure the party the compensated party could have sued

surface water

water on ground where water doesn’t normally accumulate (ex, not a lake)

theft

taking of property without the owner’s consent

third party

someone not party to the insurance contract (but may have rights therein)

tort

a legal wrong other than breach of contract for which the courts will provide remedy

tortfeasor

someone who commits a tort (defendant)

total loss

complete destruction of insured property

underwriter

person who assumes a risk in return for premium or an employee of the insurance company who accepts/rejects insurance applications

utmost good faith

complete honesty and zero concealment

valued policy

when the property is a total loss, the insurer will pay an amnt equal to the previously agreed-upon value of that property

void

no legal force

voidable

able to be declared void

waive

to voluntarily give up a right

waiver of coinsurance

a commercial insurance clause that states a coinsurance penalty will not apply, even if the insured has not met the coinsurance requirement, if losses are less than 2% amnt of insurance and $5k

warranty

a promise that certain facts are true and will remain true