Shared Flashcard Set

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Property and Casualty
pnc Section 1
28
Insurance
Professional
04/22/2013

Additional Insurance Flashcards

 


 

Cards

Term
Risk
Definition
the uncertainty of loss
Term
Being in an accident
Definition
what is the risk of driving a car
Term
hazards
Definition
things that increase the risk
Term
physical hazards
Definition
Result from material or structural features of a risk; oily rag left by furnace.
Term
Moral Hazards
Definition
circumstances of habits that increase probability of a loss from an insured peril; such as an insured previously convicted of arson. >dishonesty
Term
Morale Hazard
Definition
an increase in the hazards presented by a risk arising from the insured's indifference to loss because of the existence of insurance. >Failure to repair faulty wiring, believing it is less expensive to pay insurance premiums than electrician
Term
Indemnity
Definition
to restore you to where you were financially prior to the loss. Not to profit from loss.
Term
Insurable interest
Definition
based upon economics or an equity position. It is required at the lime of loss in order to recover on a policy.
Term
Actual cash value
Definition
replacement cost (at time of loss) minus depreciation (based on the age of structure), if any, equals this =
Term
Negligence
Definition
failure to act as a reasonable person would in the same set of circumstances
Term
Liability
Definition
covers bodily injury BI and property damage PD to others caused by the negligent acts of the insured.
-fire policies dont have liability coverage
-all homeowners policies do
Term
Occurrence
Definition
something occurring over a period of time, but still covered by the policy
Term
binders
Definition
a temporary insurance contract that may be verbal or written
-deemed to include all usual terms of the policy for which it was given, plus endorsements.
Term
Warranties
Definition
guarantee of truth, sprinklers/fire alarms/ burglar alarms
Term
Representations
Definition
insurance company ill require that the applicant tell the truth to the best of their knowledge on the application
-lies told are misrepresentations
Term
Concealment
Definition
the omission of a material fact. May have the effect of voiding the policy.
Term
Deposit premium/audit
(Worker's compensation and CGL)
Definition
the premium you pay is a deposit; you will be subject to audit annually and premium adjustments
Term
Certificate of insurance
Definition
states who is the insured, who is the insurer, what the policy coverage is for, including limits. Doesn't have the premium listed on it. Does have the policy effective time and date
Term
Law of large numbers
Definition
the larger the number of separate risks of a like nature combined into one group, the more predictable the number of future losses of that group within a given time period.
-It is essential that a large number of exposure units be combine.
-exposure unit in pnc is the car, home, or other item to be insured.
-insurance predict for groups not individuals
Term
Pure risk
Definition
no chance of gain, only chance of loss.
-Can only insure this
Term
Speculative risk
Definition
you may gain, you may lose; investing in the stock market is this, can't be insured
Term
Endorsement
Definition
something added to a policy to modify its terms
Term
Damages
Definition
most jurisdictions permit courts to award these to parties injured due to the negligent acts of others. These may be either specific, general or punitive
Term
Special damages
Definition
consist of medical expenses and lost wages.
-costs a claimant incurs, out of pocket expenses
-exact and verifiable figures.
Term
General damages
Definition
do not directly relate to an expense or an amount of lost income. By paying these, the insurer is attemplting to compensate the injured party for his or her mental and physical distress -pain and suffering, disfigurement, and loss of consortium.
Term
Punitive damages
Definition
awarded when the injury was caused by the gross negligence of the defendant. Often they are triple the amount of general damages awarded and are sometimes not covered by insurance.
Term
Gross negligence
Definition
willful and wanton negligence.
For ex: a defendant knew their product was faulty, and continued to sell it.
Term
negligence
Definition
a tort, a civil wrong, it is grounds for a lawsuit, the failure to act as a reasonable person would in the same set of circumstance
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