Shared Flashcard Set

Details

Property and Casualty License
Glossary
200
Insurance
Professional
10/09/2011

Additional Insurance Flashcards

 


 

Cards

Term

 

 

Abandonment

Definition

 

the abdiction of insured property into the hands of another, or into the possession of no one in particular.

Term

 

 

Absolute Liability

Definition

 

a type of liability that occurs due to extremely dangerous operations, such as the use of explosives or working at extreme heights.

Term

 

 

Accident

Definition

 

 

an uplanned, unforeseen event which occurs suddenly and at a specific place.

Term

 

 

Actual Cash Value

(ACV)

Definition

 

the required amount to pay damages or for property loss, which is calculated based on the property's current replacement value minus depreciation.

Term

 

 

Additional Coverage

Definition

 

a provision in an insurance policy that allows for more coverage for specific loss expense without increase in premium.

Term

 

 

Additional Insureds

Definition

 

individuals or business that are not named as insured on the declaration page, but are protected by the policy, usually in regard to a specific interest.

Term

 

 

Adhesion

Definition
a contract offered on a "take-it-or-leave-it" basis by an insurer, in which the insureds only option is to accept or reject the contract. Any ambiguities in the contract will be settled in favor of the insured.
Term

 

 

Admitted Insurer

Definition

 

an insurance company authorized and licensed to transact business in a particular state.

Term

 

 

Adverse Selection

Definition

 

the tendency of risks with higher probability of loss to purchase and maintain insurance more often than the risks who present lower probability.

Term

 

 

Agent

Definition

 

an individual who is licensed to sell, negotiate, or effect insurance contracts on behalf of an insurer.

Term

 

 

Aggregate Limit

Definition
the maximum limit of coverage available under a liability policy during a policy year regardless of the number of claims that may be made or the number of accidents that may occur
Term

 

 

Agreed Value

Definition
A property policy with a provision agreed upon by the insurer and insured as to the amount of insurance that represents a fair valuation for the property at the time the insurance is written.
Term

 

 

Aleatory

Definition
a contract in which the participating parities agree to exchange unequal amounts. Insurance contracts are aleatory in that the amount the insured will pay in premiums is unequal to the amount the insurer will pay in the event of  a loss. 
Term

 

 

Alien Insurer

Definition

 

 

an insurance company that is incorporated outside the United States

Term

 

 

Apparent Authority

Definition

 

the appearance or the assumption of authority based on the actions, words, or deeds of the principal or because of circumstances the principal created.

Term

 

 

Appraisal

Definition

 

an assessment of property to determine either the correct amount of insurance to be written or the amount of loss to be paid.

Term

 

 

Arbitration

Definition

 

method of claim settlement used when the insured and insurer cannot agree upon the amount of the loss.

Term

 

 

Assignment

Definition
the transfer of a legal right or interest in an insurance policy. In property and casualty insurance, assignments of policies are usually valid only with the prior written consent of the insurer.
Term

 

 

Authorized Insurer

Definition

 

an insurance company that has qualified and received a Certificate of Authority from the Department of Insurance to transact insurance in the state.

Term

 

 

Auto

Definition

 

a land motor vehicle, trailer or semi-trailer designed for use on public roads, including attached machinery or equipment; auto does not include mobile equipment.

Term

 

 

Avoidance

Definition
a method of dealing with risk by deliberately keeping away from it (e.g. if a person wanted to avoid the risk of being killed in an airplane crash, he/she might choose never to fly in a plane). 
Term

 

 

Bailee

Definition
a person or entity that has possession of personal property entrusted to him/her by owner. For example, a television repair person that has possession of a customer's television would be a bailee.
Term

 

 

Beneficiary

Definition

 

 

the person who receives the proceeds from the insurance policy.

Term

 

 

Binder

Definition

 

a temporary contract that puts an insurance policy into force before the premium has been paid. 

Term

 

 

Blanket Bond

Definition

 

 

a type of bond that covers losses caused by dishonest employees.

Term

 

 

Blanket Insurance

Definition
a single property insurance policy that provides coverage for multiple classes of property at one location, or provides coverage for one or more classes of property at multiple locations.
Term

 

 

Bodily Injury Liability

Definition

 

legal liability arising from death or physical trauma to a person as a result of a negligent or purposeful act and omissions by an insured.

Term

 

 

Boycott

Definition

 

an unfair trade practice in which one person refuses to do business with another until he or she agrees to certain conditions.

Term

 

 

Builder's Risk Coverage Form

Definition

 

 

a commercial property form that covers buildings under construction.

Term

 

 

Building and Personal Property Coverage Form

Definition

 

 

a commercial property form that covers buildings, and/or their contents.

Term

 

 

Burglary

Definition

 

 

the forced entry into another's premises with felonious intent.

Term

 

 

Cancellation

Definition

 

the termination of an in-force insurance policy by either the insured or the insurer prior to the expiration date shown in the policy.

Term

 

 

Casualty Insurance

Definition

 

a type of insurance that covers losses caused by injury to persons or damage to the property of others. 

Term

 

 

Cease and Desist Order

 

Definition

 

 

a demand of a person to stop committing an action that is in violation of a provision.

Term

 

 

Certificate of Authority

Definition
a document that authorizes a company to start conducting business and specifies the kind(s) of insurance a company can transact. It is illegal for an insurance company to transact insurance without this certificate.
Term

 

 

Certificate of Insurance

Definition

 

a legal document that indicates that an insurance policy has been issued, and that states both the amounts and types of insurance provided.

Term

 

 

Class Rating

Definition

 

the practice of computing a price per unit of insurance that applies to all applicants possessing a given set of characteristics.

Term

 

 

Coercion

Definition

 

an unfair trade practice in which an insurer uses physical or mental force to persuade an applicant to buy insurance.

Term

 

 

Coinsurance

Definition

 

an agreement between an insurer and insured in which both parties are expected to pay a certain portion of the potential loss and other expenses.

Term

 

 

Combined Single

Definition

 

a single dollar limit of liability applying to the total of damages for bodily injury and property damage combined, resulting from one accident or occurrence.

Term

 

 

Commercial Lines

Definition

 

type of insurance that pertains to business, mercantile or manufacturing establishments.

Term

 

 

Commissioner 

(Superintendent, Director)

Definition

 

 

the chief executive and administrative officer of a state insurance department.

Term

 

 

Common Law

Definition

 

an unwritten body of law based on past judicial decisions as well as usages and customs. 

Term

 

 

Complaint

Definition

 

 

a written statement of a liability claim given by the claimant; a reason for a lawsuit.

Term

 

 

Components

Definition

 

factors that determine rates, including loss reserves, loss adjusting expenses, operating expenses and profits. 

Term

 

 

Comprehensive Coverage

Definition

 

also known as Other Than Collision coverage, it covers losses by fire, theft, vandalism, falling objects, etc.

Term

 

 

Concealment

Definition

 

 

the withholding of known facts which, if material, can void a contract.

Term

 

 

Conditional Contract

Definition

 

a type of an agreements in which both parties must perform certain duties and follow rules of conduct to make the contract enforceable.

Term

 

 

Conditions

Definition

 

the section of an insurance policy that indicates the general rules or procedures that the insurer and insured agree to follow under the terms of the policy.

Term

 

 

Consideration

Definition
the binding force in a contract that requires something of value to be exchanged for the transfer of risk. The consideration on the part of the insurer is the promise to pay in the event of loss.
Term

 

 

Consultant

Definition

 

a person who, for a fee, offers advice, counsel, opinion, or service regarding the benefits, advantages, or disadvantages promised under a policy of insurance.

Term

 

 

Consumer Reports

Definition
written and/or oral statements regarding a consumer's credit, character, reputation, or habits collected by a reporting agency from employment records, credit reports, and other public sources.
Term

 

 

Contract

Definition

 

 

an agreement between two or more parties enforceable by law.

Term

 

 

Controlled Business

Definition

 

an entity that obtains and possesses a license solely for the purpose of writing business on the owner, immediate family, relatives, employer and employees.

Term

 

 

Concurrent Causation

Definition

 

 

multiple events leadings to one loss.

Term

 

 

Death Benefit

Definition

 

 

the amount payable upon the death of the person whose life is insured.

Term

 

 

Declarations

Definition
the section of an insurance policy containing the basic underwriting information, such as the insured's name, address, amount of coverage and premiums, and a description of insured locations, as well as any supplemental representations by the insured.
Term

 

 

Deductible

Definition

 

the portion of the loss that is to be paid by the insured before any claim benefits may be paid by the insurer.

Term

 

 

Defamation

Definition
an unfair trade practice in which opne agent or insurer makes an injurious statement about another with the intent of harming the person's or company's reputation.
Term

 

 

Deposit Premium Audit

Definition
a condition that allows the insurer to audit the insured's books or records at the end of the policy term, to make sure adequate premium has been collected for the exposure.
Term

 

 

Depreciation

 

Definition

 

 

the lessening of value of real and personal property due to age and wear and tear.

Term

 

 

Direct Losses

Definition

 

physical damage to buildings and/or personal property as a result of direct consequence of a particular peril.

Term

 

 

Director

(Superintendent, Commissioner)

Definition

 

 

the head of the state department of insurance.

Term

 

 

Disability

Definition

 

a physical or mental impairment, either congenital or resulting from an injury or sickness.

Term

 

 

Disclosure

Definition

 

an act of identifying the name of the producer, representative or firm, limited insurance representative, or temporary insurance producer on any policy solicitation.

Term

 

 

Domestic Insurer

Definition

 

 

an insurance company that is incorporated in the state.

Term

 

 

Domicile of Insurer

Definition

 

 

insurer's location of incorporation and the legal ability to write business in a state.

Term

 

 

Economic Loss

Definition

 

 

the estimated total cost (both insured and uninsured) of an accident.

Term

 

 

Endorsement

 

Definition

 

a printed addendum to a contract that is used to change the policy's original terms, conditions, or coverages.

Term

 

 

Estoppel

Definition

 

a legal impediment to denying a fact or restoring a right that has been previously waived.

Term

 

 

Excess Policy

Definition

 

 

a policy that only pays for loss after the primary policy has paid its limit.

 

 

Term

 

 

Exclusions

Definition

 

causes of loss, exposures, conditions, etc.  listed in the policy for which the benefits will not be paid.

Term

 

 

Exclusive or Captive Agent

Definition

 

 

an agent who represents only one company and is compensated by commissions.

Term

 

 

Experience Rating

Definition

 

method of determining the premium based on the insured's own past loss experience.

Term

 

 

Exposure

Definition

 

 

a unit of measure used to determine rates charged for insurance coverage.

Term

 

 

Express Authority

Definition

 

 

the authority granted to an agent by means of the agent's written contract.

Term

 

 

Extensions of Coverage

Definition

 

a provision in some property policies which allowed the extension of a major coverage to certain types of loss to property not specifically insured.

Term

 

 

FAIR Plan

Definition

 

Fair Access to Insurance Requirements plan is a state-run program that makes insurance obtainable to those in high risk areas who have been unable to acquire insurance through other channels.

Term

 

 

Fiduciary

Definition

 

 

an agent/broker who handles insurer's funds in a trust capacity.

Term

 

 

First Named Insured

Definition

 

 

the individual whose name appears first on the policy's declaration.

Term

 

 

Flood

Definition
a general and temporary condition of partial or complete inundation of normally dry land areas from overflow of inland or tidal waters or from the unusual and rapid accumulation or runoff of surface waters from any source.
Term

 

 

Foreign Insurer

Definition

 

 

an insurance company that is incorporated in another state.

Term

 

 

Fraternal Benefit Society

Definition

 

a life or health insurance company formed to provide insurance for members of an affiliated lodge, religious, or fraternal organization with a representative form of government.

Term

 

 

Fraud

Definition

 

 

intentional misrepresentation or deceit with the intent to induce a person to part with something of value.

Term

 

 

Functional Replacement Cost

Definition

 

 

the cost to replace damaged property with less expensive and more modern construction or equipment.

Term

 

 

Gross Negligence

Definition

 

 

reckless behavior that shows disregard for the safety or lives of others.

Term

 

 

Hazard

Definition

 

 

a circumstance that increases the likelihood of a loss.

Term

 

 

Hazard, Moral

Definition

 

the effect of a person's reputation, character, living habits, etc. om his/her insurability.

Term

 

 

Hazard, Morale

Definition

 

the effect of a person's indifference concerning loss has on the risk to be insured.

Term

 

 

Hazard, Physical

Definition

 

a type of hazard that arises from the physical characteristics of an individual, such as a physical disability due to either current circumstance or a condition present at birth.

Term

 

 

Implied Authority

Definition

 

authority that is not expressed or written into the contract, but which the agent is assumed to have in order to transact the business of insurance for the principal.

Term

 

 

Indemnity

Definition

 

compensation to the insured that restores them to the same financial position that they enjoyed prior to the loss.

Term

 

 

Independent Agents

Definition

 

agents that sell the insurance products of several companies and work for themselves or other agents.

Term

 

 

Indirect Losses

Definition

 

losses resulting from a peril, but not directly caused by it. Indirect losses may include business disruption, rent insurance, extra expenses, and other consequences that occur over time.

Term

 

 

Inflation Guard

Definition

 

a coverage extension that automatically increases amounts of insurance on buildings by an agreed upon percentage annually.

Term

 

 

Insurable Interest

Definition

 

any interest an insured may have in property that is the subject of insurance, so that damage or destruction of that property would cause the insured financial loss.

Term

 

 

Insurance

Definition

 

the transfer of the possibility of a loss (risk) to an insurance company, which in turn spreads the costs of unexpected losses to many individuals.

Term

 

 

Insurance Policy

Definition

 

a contract between an insured and an insurance company which agrees to pay the insured for loss caused by specific events.

Term

 

 

Insured

Definition

 

 

the person or organization that is protected by insurance; the party to be indemnified.

Term

 

 

Insured Contract

Definition
a definition on liability forms that describes the types of contracts in which liability is assumed by the insured and included for coverage in the policy. Examples of insured contracts are leases or premises, elevator maintenance agreements, easement agreements, and other agreements related to the insured's business.
Term

 

 

Insurer

Definition

 

an entity that indemnifies against losses, provides benefits, or renders services ( also known as the "company" or "insurance company").

Term

 

 

Insuring Agreement

Definition

 

the section of an insurace policy containing the insurer's promise to pay, the description of coverage provided and perils insured against.

Term

 

 

Intentional Tort

Definition

 

 

any deliberate act that causes harm to another person.

Term

 

 

Interline Endorsement

Definition

 

a written admendment designed to eliminate redundancy and minimize the number of endorsements in the policy.

Term

 

 

Judgement Rating

Definition

 

an approach used when credible statistics are lacking or when the exposure units are so varied that it is impossible to construct a class.

Term

 

 

Law of Large Numbers

Definition

a principal stating that the larger the number of similar exposure units considered, the more closely the losses reported will equal the underlying probability of loss.

 

Term

 

 

Legal Liability

Definition

 

a liability under the law that occurs when a person is responsible for injuries or damages to another due to negligence.

Term

 

 

Liability

Definition

 

 

responsibility under the law.

Term

 

 

Liberalization

Definition

 

a property insurance clause that extends broader legislated or regulated coverage to current policies, as long as it does not result in a higher premium.

Term

 

 

Lien

Definition

 

 

a charge, security or encumbrance on property.

Term

 

 

Limit of Liability

Definition

 

 

the maximum amount for which an insurer is liable.

Term

 

 

Lloyd's Associations

Definition

 

organizations that provide support facilities for underwriters or groups of individuals that accept insurance risk.

Term

 

 

Loss

Definition

 

the reduction, decrease, or disappearance of value of the person or property insured in a policy, by peril insured against.

Term

 

 

Loss Payable Clause

Definition

 

a provision in property insurance that is used to cover the interest of a secured lender in personal property.

Term

 

 

Loss Ratio

Definition

 

a calculation used by insurance companies to relate income from loss expenses:
loss ratio = (incurred losses + loss adjusting expense)/ earned premium.

Term

 

 

Loss Valuation

Definition

 

a factor in determining the premium charged and the amount of insurance required.

Term

 

 

Market Value

Definition

 

a seldom used method of valuing a loss based upon the amount a willing buyer would pay to a willing seller for the property prior to the loss.

Term

 

 

Misrepresentation

Definition

 

 

a false statement or lie that can render the contract void.

Term

 

 

Monoline Policy

Definition

 

 

a policy written separately as a single coverage.

Term

 

 

Mutual Assessment Insurer

Definition

 

a mutual insurance company with the right to assess policyholder's additional amounts of premium to meet operational needs.

Term

 

 

Mutual Companies

Definition

 

 

insurance organizations that have no capital stock, but are owned by the policyholders.

Term

 

 

Mysterious Disappearance

Definition

 

A disappearance of property that cannot be explained as to the location, time or the manner or property loss.

Term

 

 

Named Insured

Definition

 

 

the individual(s) whose name appears on the policy declaration.

Term

 

 

Named Peril

Definition

 

the cause of loss specifically covered by the insurance policy. No coverage is provided for unlisted perils.

Term

 

 

Negligence

Definition

 

the failure to use the care that a reasonable, prudent person would under the same or similar circumstances.

Term

 

 

No Benefit to the Bailee

Definition
a provision that excludes any assignment or granting of any policy provision to any person or organization holding, storing, repairing, or moving insured property for a fee.
Term

 

 

Nonadmitted Insurer

Definition

 

an insurance company that has not applied, or has applied and been denied a Certificate of Authority and may not transact insurance.

Term

 

 

Nonconcurrency

Definition

 

a situation in which other insurance is written on the same risk, but not on the same coverage basis.

Term

 

 

Nonrenewal

Definition

 

 

a termination of a policy by an insurer on the anniversary or renewal date.

Term

 

 

Notice of Claim

Definition

 

a provision that spells out an insured's duty to provide the insurer with reasonable notice in the event of a loss.

Term

 

 

Occurrence

 

Definition

 

a broader definition of loss, which differs from accident in that it inclides losses caused by continuous or repeated exposure to conditions resulting in injury to persons or damage to property that is neither intended nor expected.

Term

 

 

Open Peril

Definition

 

term usd in property insurance to describe the breadth of coverage provided under an insurance policy form that insures against "any risk of loss" that is not specifically excluded.

Term

 

 

Pair and Set Clause

Definition

 

a clause included in many property and inland marine policies, which provides that the insurer is not obligated to pay for the total value of a set of items if only one item has been lost, damaged or destroyed.

Term

 

 

Partnership

Definition

 

a legal entity in which 2 or more persons agree to share the profits and losses of the business.

Term

 

 

Passive

Definition
a description of an anti-theft device or system for autos which is activated automatically when the driver turns the ignition key to the off position and the key is removed.
Term

 

 

Peril

Definition

 

 

the cause of a possible loss.

Term

 

 

Personal Injury Liability

Definition

 

legal responsibility for an injury to the character of another person cause by libel, slander, false arrest, invasion of privacy and other acts.

Term

 

 

Personal Lines Insurance

Definition

 

 

type of coverage available to individuals and families for non-business risks.

Term

 

 

Policy Limits

Definition

 

the maximum amount an insured may collect, or for which an insured is protected under the terms of the policy.

Term

 

 

Policy Period

Definition

 

 

a period of time a policy is in effect ( also known as Policy Term).

Term

 

 

Policyholder

Definition

 

the person in possession of an insurance policy; may or may not be the policyowner and/or insured.

Term

 

 

 Premium

Definition

 

 

a periodic payment to the insurance company to keep the policy in force.

Term

 

 

Primary Policy

Definition

 

a basic, fundamental insurance policy which pays first with respect to other outstanding policies.

Term

 

 

Pro Rata

Definition

 

proportional distribution of shares of the loss for each insurance policy written on a piece of property.

Term

 

 

Producer

Definition

 

a person who acts on behalf of the insurer to sell, negotiate, or effect insurance contracts; also known as an agent.

Term

 

 

Proof of Loss

Definition

 

a sworn statement that must usually be furnished by the insured to an insurer before any loss under a policy can be paid.

Term

 

 

Property Damage Liability

Definition

 

legal liability arising from physical damage to tangible property of others caused by the negligence of an insured.

Term

 

 

Proximate Cause

Definition

 

 

an act or event that is the immediate or actual cause of a loss.

Term

 

 

Pure Risk

Definition

 

situations that can only result in a loss or no change; a gain is never possible. Pure Risk is the only type of insurance companies are willing to accept.

Term

 

 

Rebating

Definition

 

any inducement offered in the sale of insurance products that is not specified in the policy.

Term

 

 

Reciprocal

Definition

 

insurance resulting from an interchange of reciprocal agreements of indemnity among persons known as subscribers.

Term

 

 

Reduction

Definition

 

 

lessening the possibiity or severity of a loss.

Term

 

 

Reinsurance

Definition
a form of insurance whereby one insurance company (the reinsurer) in consideration of a premium paid to it, agree to indemnify another insurance company (the ceding company) for part or all of its liabilities from insurance policies it has issued.
Term

 

 

Replacement Cost

Definition

 

the cost to replace damaged property with like kind and quality at current price, without any deduction for depreciation.

Term

 

 

Representations

Definition

 

statements made by the applicant on the insurance application that are believed to be true, but are not gauranteed to be true.

Term

 

 

Retention

Definition
a method of dealing with risk by intentionally or unintentionally keeping a portion of it for the insured's account; the amount of responsibility assumed but not reinsured by the insurance company.
Term

 

 

Retrospective Rating

Definition

 

a self-rating plan under which the actual losses during the policy period determine the final premium (subject to a minimum and maximum premium).

Term

 

 

Right of Salvage

Definition
a provision in property insurance policy requiring that after the payment of a totatl loss to insured property, the insured must transfer the title ( or ownership) to the property to the insurer.
Term

 

 

Risk

Definition

 

 

uncertainty as to the outcome of an event when two or more possibilities exist.

Term

 

 

Risk, Pure

Definition

 

 

the uncertainty or chance of a loss occurring in a situation that can only result in a loss or no change.

Term

 

 

Risk, Speculative

Definition

 

the uncertainty or chance of a loss occurring in a situation that involves the opportunity for either loss or gain.

Term

 

 

Robbery

Definition

 

 

the taking of property from another by using violence or the threat of violence.

Term

 

 

Salvage

Definition
the amount of money realized from the sale of damaged merchandise or property. A salvage clause is found in ocean marine insurance and usually states that the rescuers of a ship are entitled to the salvage of the ship and cargo.
Term

 

 

Settlement

Definition

 

the process by which an agreement is reached and a claim is resolved in liability insurance.

Term

 

 

Severability of Interests

Definition

 

a provision that insurance applies separately to each insured in a policy, treating each individual as the only insured.

Term

 

 

Sharing

Definition
 a method of dealing with risk for a group of individual persons or businesses with the same or similar exposure to loss who share the losses that occur within that group.
Term

 

 

Specific Insurance

Definition

 

a property insurance policy that covers a specific kind or unit of property for a specific amount of insurance.

Term

 

 

Speculative Risk

Definition

 

the uncertainty or chance of a loss occurring in a situation that involves the opportunity for either loss or gain.

Term

 

 

Split

Definition
separately stated limits of liability for different coverages, whcih may be stated on a per person, per occurrence, per policy period basis, or can be divided between bodily injury and property damage.
Term

 

 

Stated Amount

Definition

 

 an amount of insurance scheduled in a proprty policy which is not subject to any coinsurance requirements in the event of a covered loss.

Term

 

 

Statute Law

Definition

 

the written law as enacted by a legislative body (i.e. the laws of the state), which generally takes precedence in cases where both common law and statute law apply.

Term

 

 

Stock Companies

Definition

 

companies owned by the stockholders whose investments provide the capital necessary to establish and operate the insurance company.

Term

 

 

Strict Liability

Definition

 

a liability that refers to damages caused by defective products even though the manufacturer's fault or negligence cannot be proven.

Term

 

 

Subrogation

Definition
the acquisation by an insurer of an insured's rights against any third party for indemnification of loss or other payment, to the extent that the insurer pays the loss.
Term

 

 

Superintendent

(Commissioner, Director)

Definition

 

 

the head of the state department of insurance.

Term

 

 

Surety Bond

Definition

 

a guarantee that debts and obligations will be carried out, and the benefits will be paid for losses caused by nonperformance.

Term

 

 

Surplus Lines

Definition

 

 

insurance for which there is no readily available, admitted market.

Term

 

 

Theft

Definition
any act of stealing or removing property from  its rightful owner. Theft encompasses both the burglar and the robbery.
Term

 

Third-Party Provisions

Definition
insurance provisions that address the rights of someone other than the policyowner to have a secured financial interest in the insured property.
Term

 

Tort

Definition
a wrongful act or the violation of someone's rights that leads to legal liability. Torts are classified as intentional or unintentional (referred to as negligence).
Term

 

Transfer

Definition
a basic principle of insurance under which the risk of financial loss is assigned to another party.
Term

 

Twisting

Definition
a form of misrepresentation in which an agent persuades an insured/owner to cancel, lapse, or switch policies, even when it's to the insured's disadvantage.
Term

 

Umbrella Liability Policy

Definition
coverage that provides extra protection against liability, and excess amount of insurance above the primary policy.
Term

 

Unauthorized Insurer

Definition
an insurance company that has not applied, or has applied and been denied a Certificate of Authority.
Term

 

Underwriter

Definition
a person who evaluates and classifies risks to accept or reject them on behalf of the insurer. 
Term

 

Underwriting

Definition

 

the process of reviewing, accepting or rejecting applications for insurance.

Term

 

Unilateral Contract

Definition
a contract that legally binds only one party to contractual obligations after the premium is paid.
Term

 

Underinsured Motorist Coverage

Definition
coverage in an automobile insurance policy under which the insurer will pay costs up to specified limits for bodily injury, if liable driver's policy limits are exhausted and he/she cannot pay the full amount for which he or she is liable.
Term

 

Uninsured Motorist Coverage

Definition
coverage that allows the named insured, resident relative(s) and passengers in a covered auto to collect sums another driver would be legally liable to pay for bodily injury resulting from an auto accident, providing the accident was caused by an uninsured motorist, a hit-and-run driver or a driver whose insurance company is insolvent. 
Term

 

Unintentional Tort

Definition
the result of acting without proper care, generally referred to as negligence.
Term

 

Unoccupied

Definition
a property that has contents or furnishings in it, but is not being used or lived in.
Term

 

Utmost Good Faith

Definition
the fair and equal bargaining by both parties in forming the contract, where the applicant must make full disclosure of risk to the company, and the insurance company must be fair in underwriting the risk. 
Term

 

Vacant

Definition

 

a property that has no contents, furnishings, or occupants.

Term

 

Valued Policy

Definition
a policy used when it is difficult to establish the actual cash value of insured property after a loss occurs because of  its rarity or uniqueness. A valued policy provides for payment of the full policy amount in the event of a total loss without regard to actual value or depreciation.
Term

 

Vicarious Liability

Definition
a type of liability in which one person is responsible for the acts of another. For example, employers may be vicariously liable for the actions of their employees, and parents may be held responsible for negligent acts of their children.
Term

 

Waiting Period

Definition
time between he beginning of a disability and the start of disability insurance benefits.
Term

 

Waiver

Definition

 

the voluntary abandonment of a known or legal right or advantage.

Term

 

Warranty

Definition

 

a material stipulation in the policy that if breached may void coverage.

Term

 

Workers Compensation

Definition
benefits required by state law to be paid to an employee by an employer in the case of injury,disability, or death as the result of an on-the-job hazard. 
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