The giving up of ppty by an insured to the carrier, in expectation of payment for a total loss.

*This is prohibited in ppty insurance w/out prior authorization from the insurer.

An insurance professional who determines the applicability of coverage and the amount of settlement under insurance policies. 

This professional may work directly w/claimants, policy holders, estimators, engineers, and others during this process. 

They represent claimants.

Whereas independent adjusters represent insurance companies. 

aka ostensible authority.

The authority that the public reasonably believes that the agent has to act on behalf a priciple.

A ppty insurance clause which may be activated by either the insured or the insurer when it is agreed that a loss is covered, but there is a dispute over the amount of the loss. 

Each pays for an appraiser to value the loss. If the two appraisers cannot agree on the amount of loss, then they must select a 3rd neutral appraiser (umpire). 2/3 must agree on an amount of loss.

Ppty that is enticing to children, but is inherently dangerous.

The owner must take all necessary steps to prevent children from gaining unsupervised access to such ppty. This term is used in liability cases to help determine whether there was negligence. 

The voluntary, temporary transfer of ppty from owner to another party (bailor to bailee) for cleaning, repairing, safekeeping, etc. 

Ex: A person taking their clothing to the drycleaner.

Possession of the ppty changes but title does not.

Temporary evidence of insurance which provides coverage un the actual policy is issued.

In CA, binders must be in writing and can be issued for a maximum of 90 days.

Total amt of insurance for any ONE loss, applying to one or more locations and PP. 

They offer an advantage to the insured, by not limiting coverage to a specific limit for any one building and its PP. 

Insurers will typically require a listing of all individual limits that make up a blanket limit before allowing usage of a blanket limit.

A promise that is insured.

Principle: The promising party.

Obligee: The receiver, or the party who is relying on the promise to be kept.

Surety: The insurance company. 

*If the principle breaks the promise or fails to fulfill it, the surety will will make good on the promise.

A phrase which may be found in statutes and regulations

OR

it may be found in Best Evidence rules

OR

inspection clauses of insurance policies, referring to an insured's actual, original acounting records, ledgers, and journals. 

A coverage under a commerial property coverage form known as Business Income and Extra Expense....

meaning the net income before taxes plus continuing expenses that would have been earned by an insured thad there been no direct loss.

Mid-term termination of an insurance policy. 

If the policy is xld by the borrower, the return premium is calculated on a short-rate basis.

If policy is xld by carrier, the return premium is calculated on a pro-rata basis.

A commercial ppty endorsement

Mandatory in CA--allows the carier to xl the policy w/only 5 days' notice in certain circumstances.

Insurance that involves a 3rd party.

Highly synonymous with liability insurance, but workers comp and bonds are also considered casualty coverages since they involve a 3rd party.

A ppty insurance clause that requires that the limit for buildings to be set at a certain minimum level, usually 80% of the ppty's full value.

Failure to set limits in accordance with this clause will result in a financial penalty (reduced settlement) according to the coinsurance formula.

PL/Req'd limit (x) Amt of loss = RCV - Ded = ACV.

Dmgs to compensate a victim for a loss. 

There are general dmgs also called non-economic dmgs, such as pain and suffering.

Specific compensatory dmgs, also called economic dmgs, such as los wages and medical bills.

An agreement which is legally enforceable. Contracts must contain 4 elements:

1. Parties w/mental capacity to understand the terms being agreen upon.

2. Legality of purpose

3. Mutual consent

4. An exchange of consideration

Contracted drafted by only 1 party and must be accepted as-is by the other party.

Gives advantage of drafter, but if it's vague, the insured is usually seen in better favor. 

A clause stating WHERE coverage applies.

Some policies provide worldwide coverage, while others are more restrictive.

Commercial insurance for the peril of theft. 

Coverage is available in a series of "insuring agreements," including:

- Employee Dishonesty

- Forgery and alteration

- Etc.

The front page of an insurance policy which contain's the policyholder's specifications:

- named insured

- insurer

- policy period

- premium

- list of coverage

- limits and deductibles

Includes actual evidence (pictures, models) which are intended to clarify the facts for the judge and jury:

how an accident occurred, actual damages, medical problems, or methods used in committing an alleged crime. 

Many of these may not be actual evidence, but "aids" to understand.

The sworn testimony of a witness taken BEFORE trial held out of court with no judge present.

Can be requested by an atty through the use of a notice of deposition, which is a sort of subpoena. 

Loss caused by employee theft of the employer's funds or ppty.

There is crime insurance which covers the peril of employee dishonesty, and there are also fidelity bonds which can protect an employer from such loss.

A form which is an amendment to the insurance contract.

It modifies the coverage in some way (ex: corrects the insured's name, changes a limit, addes or deletes coverage, etc). 

A legal bar of impediment preventing a party (principle) from asserting a fact or claim that contradicts the position previously taken by its agent. 

The principle in effect waives its rights to make the assertion.

A person with specialized education/training/experience in a particular subject who acts as a witneess in court so that the court can rely on their expert opinion. 

Unlike ordinary witnesses, expert witnesses may also deliver "expert evidence" about facts from their field of expertise, and draw conclusions based pon the evidence.

aka stipulated authority.

The authority which an agent has been expressly told that they may act in a partiular way on behalf of a principle.

An important section o f the CA Code of Regulations pertaining to the claims adjustment process. 

It also lists 16 unfair practices and knowingly committing any of those practice to the point of appearing as a habit can result in fines/license suspension/revocation. 

The named insured which appears first on a policy's dec page. 

First named insured has the duty to pay the premium and comply with policy terms, and also is the only party which the insurer must notify in the event of cancellation. 

Nickname of an inland marine policy.

There are personal and commercial floaters.

This policy covers a range of ppty usually on open-perils and worldwide basis.

Preprinted document.

A form may be a coverage form containing:

-insurance agreements

-exclusions

-conditions

-definitions

A characteristic of an insured or the ppty itself that increases risk.

1. Physical hazard - characteristics of a ppty that are visible (dry grass = fire hazard)

2. Moral hazard - Personality characteristics of applicants. The insurance business depends on honest dealings.

3. Morale hazard - When policyholder possesses apathetic characteristics.

aka incidental authority. 

The authority that an agent believes he has to act on behalf of a principle.

Financial loss that is a consequence of direct loss to ppty.

Ex: loss of income during the time that a dmgd ppty is being repaired and it's also a business.

Ppty insurance that is in transit or has other unique characteristics (scarcity, rarity, diffuclt to fairly value, etc) and typically provides open perils protection. 

Ex: cargo, contractors equipment, fine arts, valuable papers and records, etc

Insurance Policy

and 6 components

A method of treating pure risk. Transfers risk of loss from the insured to the insurer.

Insurance policies are also known as contracts of adhesion.

A policy must contain:

1. Parties of the contract

2. Objects of insurance

3. The insurable interest of the insured

4. Risks insured against

5. Policy period

6. Premiums

A set of questions submitted to a party for his adversary to answer in writing and signed under oath prior to appearing in court. 

It's a discovery device to determine what issues are present in a case and how to respond.

A fact is material when a policyholder's failure to reveal it negativiley affects an insurer's ability to evaculate the risk involved. 

A material fact is relevant to the underwriting decision.

An unintentional tort in which one fails to use the care that a reasonable person would have in those circumstances.

To prove negligence, a plaintiff must show:

1. a duty of care existed

2. that duty of care was breached

3. there was dmg or injury

4. dmg resulted from that breach of duty

An accident including repeated and continued exposure to similar harmful conditions. 

Accidents = suddenly

Occurrences = may happen suddenly over time.

A loss-apportionment condition that is activated when a loss is covered by more than one policy.

1. Pro-rata

2. Contribution by equal shares

3. Primary/excess

An inland marine policy for individual PP risk.

Open-perils approach

A policy intended for individual owners and operators fo private passenger autos, pickups, and vans. 

4 coverages:

- liability

- medical payments

- uninsured motorists

 - dmg to your auto

A coverag found in all Homeowners forms.

Covers insureds for bodily injury and ppty dmg laibility

Latin: "on the first appearance."

When a legal claim is presented, sufficient evidence needs to be presented to support there's even a legit case to deal with or else it can be easily dismissed.

A type of Other Insurance Clause an insurer will pay in proportion to how its coverage limit bears to the total amount of insurance in force.

OR

Pro-rata can also mean the unearned premium which an insurer will return to the policyholder if the insurer xls the policy.

A type of valuation  clause in ppty or marine policy.

The cost to repair/replace with new materials of similar make, quality, design, etc, without deduction for depreciation. 

Latin: "The thing speaks for itself" used in tort proceedings to demonstrate legal liability.

1. the principle that the occurrence of an accident implies negligence.

It involves identifying the ppty and casualty risks that a person or company has, and then treating them in some combination of 4 ways:

1. TRANSFER the risk - buy insurance

2. RETAIN the risk - dont buy insurance, or set deductibles in policy

3. REDUCE the risk - less the chance of having a loss

4. AVOID the risk - discontinue the activity or disposing of the ppty