Property

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accident
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Terms in this set (98)
accident
a loss that occurs at a specific time and place
admitted insurer; authorized insurer
company that meets a state insurance department's standards and is allowed to do business in the state.
annual transit policy
nonfiled commercial inland marine transportation form that insures a property owner's incoming or outgoing shipments of goods during a year
abandonment condition
a condition often contained in property insurance policies that state that the insured cannot abandon damaged property to the insurer and demand to be reimbursed for its full value.
actual Cash Value (ACV)
today's replacement cost minus depreciation. Depreciation from wear and tear, or obsolescence.
adverse selection
the tendency of insureds with a greater than average chance of loss to purchase insurance.
appraisal clause
A survey of property to determine the insurable value of the property or the value of the loss sustained.
appraisal condition
policy condition that outlines a procedure for when the insured and insurer disagree on the amount of a loss. Each party selects an appraiser and two appraisers select an umpire. if the appraisers cannot agree on the amount of loss, then the umpire is consulted. umpire decision in final
assignment
the legal transfer of one's interest in an insurance policy to another person
aviation hull insurance
Provides coverage for physical damage to an aircraft.
bailee's customer policyNonfiled commercial inland marine form obtained by a bailee to cover loss or damage to customers' property in the bailee's custody without regard to liability.appurtenant structuresbuildings of lesser value that are on the same premises as the main building insured under a property policyassignment conditionCondition in insurance policies that specifies that the policy cannot be transferred to another unless the company consents to the transfer in writing.baileea person or organization that has temporary possession (care, custody, or control) of someone else's personal propertybasic perils in homeowner policythere are 14 perils. fire, lightening, riot, explosion, vehicles, volcanic eruption, civil commotion, smoke, hail, aircraft, windstorm, vandalism, malicious mischief, theftBasic Property Policy Structure (DICEE)D - Declarations I - Insuring agreement C - Conditions E - Exclusions E - Endorsementsblanket insuranceType of insurance policy that covers more than one item of property at a single location or one or more items of property at multiple locationsbuilders risk coverage formA commercial property form that covers commercial, residential, or farm buildings that are under construction or during remodelingcargo insurancetype of ocean marine insurance that covers goods while they are in transit over waterbinderoral or written statement that provides immediate insurance protection for a specified period; designed to provide temporary coverage until a policy is issued or deniedBOPpackage policy designed to provide broad property and liability coverage for small businesses, eligibility requirements are strickter than the CPPbusiness income policypays for loss of income that the insured sustains due to a direct physical loss from a covered peril that forces the insured to suspend operations until the property can be repaired, rebuilt, or replaced with reasonable speed; available with or without extra expense coveragecauses of loss formSeparate form used with the Commercial Property coverage part of the Commercial Package policy that lists covered perils and exclusions. Several different versions provide increasingly broader coverage from basic to broad to special.condominium association coverage formCommercial Property coverage form that covers the buildings in a condominium complex. Does not cover condominium owner's personal property.coverage D on a HO policy - Loss of UseIf property loss makes the residence premises uninhabitable, the additional living expenses are covered; or if a covered loss to the insured's property makes a part of the residence premises uninhabitable that is rented to others or held for rental by the insured, this coverage will pay the fair rental value.coverages excluded on dwelling policyTheft, vandalism, and malicious mischief excluded on basic policy. Liability excluded on all policies.coverage b of homeowners policyOther structures; covers building and structures on the premises other than the dwelling set apart by a clear space from the dwelling; 10% of Coverage A.coverage D on a dwelling policyFair rental value is covered on a dwelling policy.coverage limit on money in HO$200 limit on personal property with special limitscoinsurance clause on property(insurance carried/insurance required) * amount of losscoverage F on homeowners policyMedical payments to others; pays all necessary medical expenses for up to three years after an accident.deductibleThe amount of expenses that must be paid out of pocket before an insurer will pay any expenses from a covered lossdirect lossfinancial loss resulting directly from loss to propertyequipment breakdown coverage; boiler and machinery coveragepart of the commercial package policy that covers a loss due to breakdown of business equipment due to direct or indirect lossexcess insuranceWhen two or more policies or coverages apply to the same loss, the one that applies only after the limits of the primary coverage have been exhausteddifference in conditions insurance (DIC)type of commercial property policy that covers most insurable perils but excludes basic fire and extended coverage perilseligible for dwelling policyProvides coverage for the following: -Up to five boarders -Up to four apartments -Mobile home -Residence rented to others -Vacation home -Townhouse/rowhouse -Home under constructionestoppelPrinciple that states that if one intentionally or unintentionally creates the impression that a certain fact exists, and an innocent party relies on that impression and is injured as a result, the guilty party may be legally prohibited from asserting that the fact does not existextra expenseCommercial property coverage form that covers additional expenses incurred by the insured business to continue operations following a direct loss by a peril insured againstFair Access to Insurance Requirements (FAIR) plansprogram established by law that makes property insurance available to insureds who might otherwise be uninsurable in the standard marketfarm policy coverages (1)farm property Coverage A: dwelling coverage B: other structures non-farming coverage C: household personal property coverage D: loss of usefarm policy coverages (2)farm property coverages coverage E: scheduled farm personal property coverage F: unscheduled farm personal property coverage G: barns, outbuildings, other farm structuresfarm policy coverages (3)farm liability coverages coverage H:BI and PD Coverage I: personal and advertising injury coverage J: medical payments to othersficuciarysomeone who has undertaken to act for and on behalf of another in a particular matter in circumstances which give rise to a relationship of trust and confidencefloateran insurance policy, or an addition to another insurance policy, covering personal property deemed to be easily movable. it covers property lost, damaged, or destroyed (jewelry, electronics, and furs)flood-an overflow of inland or tidal waves -usual and rapid accumulation or runoff of surface water from any source, unless general flooding exists -mudslides caused by accumulations of water on the ground or underground -collapse of land as a result of erosion due to floodfrauda deliberate misrepresentation that causes harm; an all out effort by one party to deceive and cheat the other; must have intentfreight insuranceType of ocean marine insurance that protects the insured against the loss of shipping costsFunctional Replacement Costdamaged property is repaired or replaced with less expensive, but functionally equivalent, materials.HO-3 policy perilsDwelling covered for open perils and personal property covered for broad perils in this HO policy.HO-4 policyRenters policy. Personal property covered for broad perils.indemnityrestores an insured to the approximate condition before the loss, no better or worseinherent viceCharacteristic in property itself causing it to depreciate, spoil, break, become defective, disintegrate, or destroy itself.inland marine insuranceproperty insurance coverage designed to insure exposures that cannot be conveniently or reasonably confined to a fixed location or insured under a standard form. includes coverage for property in transit, overland, movable property, instruments of transportation and communication (bridges, roads, and television/radio towers), legal liability for bailees, coverage, and computerized equipmentInsuring AgreementSection in the policy that describes what property is covered and the perils the policy insures against.intervening causeAn independent action that breaks the chain of causation and sets in motion a new chain of events; when this occurs, it becomes the new proximate causejettisona voluntary action to rid a ship of cargo to prevent further damage or perillegal liability coverageCommercial property coverage form that covers the insured for liability arising out of negligent damage to the property of others while it is in the insured's care, custody, or control.liberalization clauseCondition found in property insurance contracts that provides that if the insurer broadens coverage under a policy form or endorsement without requiring an additional premium, then all existing similar policies or endorsements will be construed to contain the broadened coverageMCS-90Endorsement attached to the Truckers coverage form to provide public liability coveragemessengerin a crime policy, defined as an insured, partner, or employee who has care and custody of insured property outside the premisesmorale hazardHazard created by an individual's tendency to contribute to a loss through his or her own irresponsible actions or carelessness.motor carrier coverage formcommercial auto coverage form that is an alternate to the truckers coverage form; it can be used to cover anyone who transports property by auto in a commercial enterprisemotor truck cargo policyCommercial inland marine policy that protects a carrier against its liability for damage to domestic shipments in its custody.Mysterious Disappearanceloss of property due to unknown cause; theft must be ruled outnamed (specified) peril policyInsurance policy that insures only against perils specifically listed in the policy.National Flood Insurance Program (NFIP)Program run by the federal government that makes flood insurance available to eligible communities at subsidized rate; includes coverage for both building and personal property with separate deductible for each.nonconcurrencySituation that exists when the same property is covered by more than one policy, but the policies are not identical as to the extent of coverage provided.ocean marine insuranceinsurance designed to provide broad coverage for cargo and ships in transit over sea; includes cargo insurance, hull insurance, freight insurance, and protection and indemnity insuranceopen peril; all risk; special coverageInsurance policy that protects the insured from losses caused by any peril that is not specifically excluded by the policypair and set provisionFound in some property and inland marine policies stating the company will pay for loss of part of a set by either repairing or replacing the damaged article or paying the difference between the ACV of the intact set and the ACV of the articles remaining after the loss.parts of a homeowners policyCoverage A - dwelling Coverage B - other structures Coverage C - personal property/contents Coverage D - loss of use/additional living expenses Coverage E - personal liability Coverage F - medical payments to othersParts of a legal contract (CLOC/CLAC)Competent parties Lawful objective Offer and acceptance Considerationpersonal effects formInland marine form that covers an insured's personal belongings, such as baggage, while traveling.primary insuranceWhen two or more coverages or policies apply to the same loss, the one that pays first, up to its limit of liability or the amount of the loss, whichever is lesspro rata basisInsurance company cancels the policy; unearned premium is returned to the insured. No penalty is applied to this method of cancellation.pro rata other insurance; contribution by limitsMethod of handling insurance when more than one coverage applies to a loss; each coverage pays a portion of the loss in proportion to the relationship its limit of liability bears to the total limit of liability under all applicable insuranceprotection and indemnityForm of ocean marine liability insurance that covers a variety of types of liability, such as damage to cargo through negligence and damage to other property or another boat resulting from collisionpure riskA risk in which there is only a chance of loss; also called insurable risk.recovery clauseIn a property form, if the property is recovered after the insured have received payment for the loss the insured must notify the insurance company. The insured must make a decision either to keep property or the settlement amount but not both.repair costThe cost to fix a damaged or destroyed item of property; may be the basis of reimbursement for a loss.replacement costThe cost to replace the lost or damaged property with property of like kind and quality, without a deduction for deprecationrepresentationstatements on an insurance application that the applicant believes are true; not considered a matter to which the parties contract, so a policy cannot be voided on this basissalvageinsured property that is damaged by a covered peril; the insured is paid by the insurance company who may take possession of the propertyscheduled coverageProperty that is specifically listed in the declarations and covered for a specific amount. (also called specific insurance)self-insurancealternative to purchasing insurance where a company or individual assumes the risk of paying for its losses and sets aside the necessary funds to pay for such lossesshort rateWhen an insured cancels a policy before the expiration date, the insurance company keeps the premium for insurance already provided (called earned premium), but also keeps an allowance (called penalty or surcharge) for expenses on the unearned premium.stated-value policyInsurance contract written to insure property or a piece of property for specific amount. Fine arts, collectibles, and other hard-to-value assets may be valued this way.Subrogationprevents double recovery by assigning or substituting the right of one party (insured) to another (insurer) to collect damages from another partyTerrorism Risk Insurance Act (TRIA)federal law designed to ensure that insurance coverage for terrorism losses under commercial line policies will be available and affordable; it requires insurers to pay a specified amount for terrorism losses in a given calendar year; once that limit is reached, the federal government will reimburse insurers 85% of insured losses that exceed the limit. act of terrorism to be certified by the secretary of the treasury in concurrence with secretary of state and attorney general of the UStime element coveragecoverage for the loss of business income over a period of time that results from direct physical losstrip transit policyNonfiled commercial inland marine policy that covers a single shipment of goods.Unilateral Contracttype of that is one sided; an insurance policy is one sided because only the insurer is legally bound to perform its part of the agreementunoccupiedAbsence of people from the insured premises - contents with no activity.vacancyabsence of both people and property from the insured premises - no contents/no activityvalue reporting endorsementEndorsement used with the Commercial Property coverage part to provide coverage based on the actual values of property at certain locations at specific times.warrantyspecific agreement between the insured and the insurer that becomes a part of the insurance policy; a breach of warranty can void the policywatercraft policyPackage policy that provides property liability and medical payments coverage for losses arising out of the ownership maintenance or use of a watercraft.