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AIC 38 - Ch 1: Personal Insurance Overview
All key words and phrases from AIC 38's Chapter 1 (Personal Insurance Overview)
38
Insurance
05/17/2011

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Term
Loss Exposure
Definition
Any condition or situation that presents a possibility of loss, whether or not an actual loss occurs
Term
Cause of Loss (peril)
Definition
The actual means by which property is damaged or destroyed
Term
Property Loss Exposure
Definition
A condition that presents the possibility that a person or an organization will sustain a loss resulting from damage (including destruction, taking, or loss of use) to property in which that person or organization has a financial interest
Term
Real property (realty)
Definition
Tangible property consisting of land, all structures permanently attached to the land, and whatever is growing on the land
Term
Personal Property
Definition
All tangible or intangible property that is not real property
Term
Liability Loss Exposure
Definition
Any condition or situation that presents the possibility of a claim alleging legal responsibility of a person or business for injury or damage suffered by another party
Term
Damages
Definition
Money claimed by, or a monetary award to, a party who has suffered bodily injury or property damage for which another party is legally responsible
Term
General Damages
Definition
A monetary award to compensate a victim for losses, such as pain and suffering, that do not involve specific measurable expenses
Term
Special Damages
Definition
A form of compensatory damages that awards a sum of money for specific, identifiable expenses associated with the injured person's loss, such as medical expenses or lost wages
Term

Punitive Damages

(exemplary damages)

Definition
A payment awarded by a court to punish a defendant for a reckless, malicious, or deceitful act to deter similar conduct; the award need not bear any relation to a party's actual damages
Term
Civil Law
Definition
A classification of law that applies to legal matters not governed by criminal law and that protects rights and provides remedies for breaches of duties owed to others
Term
Tort
Definition
A wrongful act or an omission, other than a crime or a breach of contract, that invades a legally protected right
Term
Negligence
Definition
The failure to exercise the degree of care that a reasonable person in a similar situation would exercise to avoid harming others
Term
Personal Financial Planning Loss Exposures
Definition
Life, health, and retirement related loss exposures
Term
Temporary Partial Disability (TPD)
Definition
A disability caused by a work-related injury or disease that temporarily limits the extent to which a worker can perform job duties; the worker is eventually able to return to full duties and hours
Term
Temporary Total Disability (TTD)
Definition
A disability caused by a work-related injury or disease that temporarily renders an injured worker unable to perform any job duties for a period of time; the worker eventually makes a full recovery and can resume all job duties
Term
Permanent Partial Disability (in Work Comp)
Definition
A disability caused by a work-related injury or disease that impairs the injured employee's earning capacity for life, but the employee is able to work at reduced efficiency
Term
Permanent Total Disability (in Work Comp)
Definition
A disability caused by a work-related injury or disease that renders an injured employee unable to ever return to gainful employment
Term
Risk Management Process
Definition
The method of making, implementing, and monitoring decisions that minimize the adverse effects of risk on an organization
Term
Risk Control
Definition
A conscious act or decision not to act that reduces frequency and/or severity of losses or makes losses more predictable
Term
Risk Financing
Definition
A conscious act or decision not to act that generates the funds to pay for losses and risk control measures or to offset variability in cash flows
Term
Avoidance
Definition
A risk control technique that involves ceasing or never undertaking an activity so that the possibility of a future loss occurring from that activity is eliminated
Term
Loss Prevention
Definition
A risk control technique that reduces the frequency of a particular loss
Term
Loss Reduction
Definition
A risk control technique that reduces the severity of a particular loss
Term
Separation
Definition
A risk control technique that isolates loss exposures from one another to minimize the adverse effect of a single loss
Term
Duplication
Definition
A risk control technique that uses backups, spares, or copies of critical property, information, or capabilities and keeps them in reserve
Term
Diversification
Definition
A risk control technique that spreads loss exposures over numerous projects, products, markets, or regions
Term
Retention
Definition
A risk control financing technique by which losses are retained by generating funds within the organization to pay for the losses
Term
Insurance
Definition
A risk management technique that transfers the potential financial consequences of certain specified loss exposures from the insured to the insurer
Term
Transfer
Definition
In the context of risk management, a risk financing technique by which the financial responsibility for losses and variability in cash flows is shifted to another party
Term
Workers Compensation
Definition
A system that pays lost wages, medical and vocational rehabilitation expenses, and death benefits to injured workers or their dependents for employment-related injuries and diseases
Term
Policy Provisions
Definition
Any phrase or clause in an insurance policy that describes the policy's coverages, exclusions, limits, conditions, or other features
Term
Declarations Page
Definition
An insurance policy information page or pages providing specific details about the insured and the subject of the insurance
Term
Endorsement
Definition
A document that amends an insurance policy
Term
Definitions
Definition
A preliminary section of an insurance policy identifying the insured, the insurance company, and the commonly used terms found throughout the policy
Term
Insuring Agreement
Definition
A statement in an insurance policy that the insurer will, under described circumstances, make a loss payment or provide a service
Term
Policy Condition
Definition
Any provision that qualifies an otherwise enforceable promise made in the policy
Term
Exclusion
Definition
A policy provision that eliminates coverage for specified exposures