Insurance License Test Practice
All of the important terms that I need to know in order to obtain my Insurance License.
Terms in this set (196)
Possibility (uncertainty) that a loss may occur.
-The reason people buy insurance
-Insurance is designed to provide for such losses, while not providing the insured with the possibility of gain from an accident, sickness, death, etc.
Notifying the insurer (insurance company) of a loss in order to be paid for it.
-Car accident, windshield replacement, etc.
An unpredictable reduction in the quality, quantity, or value of something.
-Bodily injury, disease, property damage, physical disappearance of property, incurred expenses, death, etc.
-To be paid for a loss, the insured much notify insurer by filing a claim.
The written contract or certificate effecting insurance; including papers attachd to and made a part of it.
The party to an insurance agreement to whom, or on behalf of whom, the insurance company agrees to indemnify for losses, provide benefits, or render services.
1) Consideration for the insurance.
2) Periodic payment made to keep the policy in force.
-A large, uncertain loss is traded in this way for a small, certain loss, the premium.
The "insurance company" assuming risk and agreeing to pay claims to provide services.
-Recieves relatively small amounts of money (premium) from each large number of people buying insurance.
Spreading the chance of financial loss among a large number of people.
-By purchasing insurance, a person shares risk with a group of others, reducing individual potential for disastrous consequences.
A risk that may result in a loss or gain. Offers the opportunity for gain as well as the possibility of loss. Insurance companies insure Pure risk, not speculative.
-Ex: Gambling is a speculative risk.
A risk in which there is no chance of a gain, only loss.
-Possibility that a certain event will occur; accident or sickness.
-Purpose of the insurance to restore the insured for his/her original position.
Anything that increases the seriousness of a loss or increases the likelihood that a loss will occur (risk) due to a peril.
-Ex: Improperly stored combustible materials, worn tires, intentional abuse to insured property, unsafe structural changes.
The material, structural or operational features of the risk itself, apart from the morale or moral hazards of persons owning or managing it.
-Dead tree next to the house and could blow over during the next windstorm, causing damage to your roof.
The hazard that is created by a dishonest individual who would be willing to create a loss situtation (damages their own property) on purpose just to collect from the insurance company.
Hazard created by an individual's tendency to contribute to a loss through his or her own irresponsible actions or carelessness.
-Someone with no pride of ownership in their property.
Cause of potential loss. An insurance policy may "name" the perils insured against, or it may be an "All-Risk" form: One that insures against all perils not specifically excluded in the policy.
-Cause of loss: Fire, lightning, wind, etc.
Law of Large Numbers
An insurance company bases its rates on a homogenous group. Risks are not "usually" considered insurable unless the insurer has a large enough base of previous loss experience to be able to accurately project future losses. It is the Law of Large Numbers that makes accurate predictions of similar risks possible.
Liability that arises from an extremely dangerous situation. Absolute Liability is often found in cases involving explosives.
-Also known as "strict" liability.
-Ex: You are absolutely liable if you keep a wild animal as a pet.
A sudden and unexpected event, occuring at a specific time and place.
Actual Cash Value (ACV)
The cost to replace an item of property at the time of loss, less an allowance for depreciation. Often used to determine amount of reimbursement for a loss (Replacement Cost minus Depreciation).
A person, firm, or corporation other than the "Named Insured" on a policy, or a lender named in a mortgage clause, who is protected against loss by the terms of the policy.
Additional Living Expenses
A coverage designed to reimburse the insured for an increase in living expenses necessitated by loss to the dwelling. The "Indirect Loss" must be the result of Direct Loss by a covered peril.
Represents the insurance company and acts for the company in working on agreements as to the amount of a loss and the liability of the company.
A company that meets the state insurance department's standards and is authorized by the Director to do business in the state.
An individual appointed by an insurance company to solicit, negotiate, effect, or countersign insurance contracts on its behalf.
A tupe of policy limit found in Liability policies that limits coverage to a specified total amount for all losses occuring within the policy period.
An insurance company incorporated in a country other than the United States.
Property coverages that are closely associated with and frequently sold with fire insurance.
-Ex: Dwelling Building and Contents, Earthquake Insurance, Sprinklet Leakage, etc.
Insurance protecting the insured from loss arising from any peril other than those specifically excluded by name. This contrasts with "Named Peril Insurance," which means the Peril(s) insured against.
A questionnaire that is filled out by an agent and the prospect seeking insurance. The form contains rating and underwriting information. The applicant is expected to make representations by answering questions to the best of his/her knowledge.
An estimate of the quantity, quality, or value of something. The process through which conclusions of property value are obtained; also refers to the report that sets forth the process of estimation and conclusion of value.
A structure or belonging to the insured structure, such as a tool shed. Appurtenant structures are provided for in the Homeowners policy and other Dwelling policies. This coverage is often called Other Structures or Out Buildings.
There are some applicants that underwriters do not care to insure, but because of state law or otherwise, must be provided protection.
To become authorized, a Casualty company must agree to participate in the Assigned Risk Pool and take its turn providing Auto Insurance to high-risk drivers.
-Also known as the auto insurance "plan."
A survey of the financial records of the insured conducted to determine exposures, limits, etc, which are needed to calculate the premium. The initial premium is only a deposit.
One who has temporary custody of property belonging to another.
-Ex: Dry cleaners
Bailee's Customers Policy
Insurance obtained by a bailee, to cover loss or damage to customers' property in the bailee's custody, with regard to liability.
Binders and other temporary insurance contracts may be made orally or in writing. Each binder is deemed to include all usual terms of the policy for which it was given, plus endorsements. Life or Disability insurance utilizes conditional receipts instead of binders.
Blanket Position Bond
Fidelity bond that specifies a single limit of Liability applicable to each employee involved in a loss.
Usually definded to include bodily harm, sickness, disease, including required care, loss of services and resulting death.
Boiler and Machinery Policy
Insurance that covers the insured against loss (Liability and Physical Damage) arising out of the use of steam boilers or other machinery. May be written as a separate policy or as part of a Commercial Package Policy.
An obligation of the insurance company to protect one against financial loss caused by the act of others.
One who represents an insured in the solicitation, negotiation, or procurement of contracts of insurance, and who may render services incidental to those functions.
Brokers may also be licensed as agents.
(As it is defined in Crime insurance policies)
The unlawful taking of property by forced entry into the premises, or exit from the premises, while the premises are closed for business. There must be visible evidence of forced entry or exit.
BusinessOwners Policy (BOP)
A commercial package policy designed for certain types of small businesses, combinding Property and Liability coverages. Very similar to a Commercial Package Policy (CPP).
Termination of contract of insurance in force by voluntary act of the insurance company or insured, effected in accordance with provisions in the contract or by mutual agreement.
A type of insurance that is primarily concerned with losses caused by injury to persons and legal liability imposed upon the insured for such injury or damage to property of others.
1) In Property Insurance, a clause under which the insured shares in losses to the extent that he/she is underinsured at the time of the loss.
2) In Health Insurance, a provision that the insured and insurance company will share covered losses in agreed proportion. In Health Insurance, the preferred term is "Percentage Participation."
Commercial Package Policy
A multi peril, multiline policy that provides a broad spectrum of Property and Casualty coverages for businesses.
In addition to required basic Property and Liability insurance, the insured may add additional Marine, Boiler and Machinery, Glass, Crime, Business Auto or Farm coverages.
Doctrine that a defendant is liable only for the amount of damages allocated to that defendant in direct proportion to the defendant's percentage of fault (if not 51% or more at fault, defendant is not held liable).
Competitive State Fund
A state fund writing Workers' Compensation insurance in competition with private insurance.
Comprehensive Peronsal Liability
Nonbusiness Liability exposure of individuals who are insured under this policy. The most common Personal Liability exposures arise out of the residence premises and activities of individuals and family members. Comprehensive Personal Liability coverage first became available as a separate policy. Eventually, it was incorporated into Homeowners policies.
Any form of insurance which is required by law. In many states, for example, automobile bodily injury liability insurance is compulsory for all owners of automobiles.
The withholding of a material fact from the insurance company. May void the policy.
The portion of an insurance contract that sets forth the rights and duties of the insured and the insurance company.
Indirect losses that occure as a "consequence" of a direct loss. Includes "Time-Element" coverages, such as coverage for rental value.
A characteristic of a legal contract: the thing of value exchanged for the performance promised in the contract. In insurance, the applicant's answers and policy premium paid constitute the consideration.
Contingent Business Income
A Time-Element coverage that protects the insured against Indirect Loss that results because of a Direct Loss to a supplier, buyer, or leader location.
Liability that an insured person or business incurs because of the actions of other (family or employees).
-Also called "Vicarious Liability."
A legal agreement between two parties promising a certain performance in exchange for a certain consideration.
Provides coverage against liability arising out of an insured's contractual obligations.
The signature of a licensed agent, which, in most states, must appear on the policy to validate the contract.
In Crime Insurance, a custodian is the insured or a regular employee or partner of the insured who has "care or control of property" within the premises. Does not include watchman, porter or janitor.
A coverage provided in many Property contracts that reimburses the insured for expenses involved in removing "debris produced by a loss" from a Peril insured against.
Declarations Page (Dec Sheet)
A portion of the insurance contract that contains information such as the name and address of the insured, the property insured, its location and description, the policy period, the amount of insurance coverage, applicable premiums, and supplemental representations by the insured.
Usually, a dollar amount the insured must pay on each loss to which the deductible applies. The insurance company pays the remainder of each covered loss up to the policy limits.
Loss that is a direct result of a Peril, such as fire.
An insurance company that sells its policies through licenses agents who represent the insurer exclusively, rather than through independant local agents, who represent several insurance companies.
The return of part of the premium paid for the participating policy.
Domestic Insurance Company
An insurance company formed under the laws of the state in which the insurance is written.
The portion of he premium for which policy protection has already been gven during the now-expired portion of the policy term.
The date on which an insurance policy or bond goes into effect and from which portection is furnished.
Employers Liability Coverage
Coverage provided under a Workers' Compensation policy to cover the employer's liability arising out of employee' work-related injuries.
Employers Non-Ownership Liability
Provides coverage to an employer for liability arising out of an employee's use of his own auto in the employer's business. May be included under a Business Auto Policy of added to a Commercial General Liability.
A document, agreed to by both parties, that is attached to the policy and modifies or changes the original policy in some ways.
Errors and Omissions
A Professional Liability coverage that protects the insured against liability for committing an error or omission n performance of professional duties.
Causes, conditions, or property listed in the policy that are not covered and for which no benefits are payable.
A Boiler And Machinery coverage that covers the cost of temporary repairs and the costs of speeding up permanent repairs.
Ex: Overtime, express transportation charges.
The loss record of an insured, a class of coverage , or an insurance company.
Extended Coverage Endorsement (ECE):
A specific endorsement, attached to a standard Fire policy, usually providing coverage for windstorms, hail, explosions, riot, civil commotion, aircraft, vehicular damage, volcanic eruption and smoke damage.
Extra Expense Insurance
A Time-Element coverage for additional expenses incurred by the insured business to continue operations following a Direct Loss by a Peril insured against.
Fair Access to Insurance Requirements. A program established by law that makes Property insurance available and affordable to insureds who might otherwise be uninsurable because of "environmental hazards."
Federal Crime Insurance
A federally administered program that makes crime insurance available and affordable to risks that might otherwise have found coverage difficult to obtain.
A class of bonds that guarantees an employee's honest discharge of duty.
A person who occupies a position of special trust and confidence.
Ex: One handling or supervising the affairs or funds of another.
Financial Responsibility Laws
State laws that require owners or operators of autos to provide evidence that they have the funds to pay for automobile losses for which they might become liable. Insurance is the usual method for providing this evidence by the state.
Combustion, sufficient to produce a spark, flame or glow, that is hostile (not in a place where it is intended to be). A "friendly fire" is one in your fireplace.
1) Contract that indemnifies an insured for loss caused by the destruction of the insured property resulting from fire.
2) The field of insurance that provides policies on the insured property for a variety of Perils, including fire.
Protection that follows moveable property, covering it wherever it may be, rather than applying only at a fixed location, such as a Personal Articles Floater (PAF).
Insurance designed to reimburse property owners for loss due to flood or to flood-related erosion. Administered through the Federal Insurance Administration, but marketed through independent agents.
A false statement intended to deceive the insurer and induce it to part with something of value or to surrender a legal right. May void a policy.
A policy that provides coverage for garage businesses. Inclues coverage for Liability, Physical Damage, and Garagekeepers Losses arising out of owned, non-owned, and hired autos.
Ex: Dealers, service stations, garages, parking lots, etc.
A coverage that is part of the Garage policy. Covers a garage risk's Legal Liability for customers' autos in the care, custody, or control of the garage. At the insured's option, can also apply without regard to fault, for an additional premium.
General Agent (GA)
An individual appointed by an insurer to administer its business in a given territory. A GA is responsible for building the agency and service force. Compensation is on a commission basis, although there may be additional expense allowances.
A contractual arrangement whereby one party assumes the Liability inherent in a situation, thereby relieving the other party of responsibility. Such agreements are typically found in contracts such as leases, sidetrack agreements and easements.
Ex: A typical lease may provide that the lessee must "hold harmless" the lessor for any liability from accidents arising out of the premises.
In Ocean Marine and Aviation insurance, insurance against physical damage to plan or ship.
Imports and Exports
A category of the Inland and Ocean Marine Nationwide Definition, which is made up of risks eligible for Marine Insurance.
Improvements and Betterments
Additions or changes made by an insured to a building that may or may not be owned by him. Cost arising from these changes may enhance values and thereby require special insurance consideration.
Insurance is designed to restore the policyholder to the same financial condition enjoyed prior to a loss. The intent is to cover the amount of the actual loss only and to avoid paying amount that allow someone to profit from a loss situation.
Loss that is a result or consequences of a Direct Loss
A condition or defect that exists within property from the beginning. A tendency of the property itself. Insurance policies usually exclude inherent vice.
Ex: The tendency of milk to sour.
Inland Marine Insurance
A form of insurance originally designed as an extension of Marine coverage to insure transportation of goods over land. Today, it covers, in addition to goods in transit, a variety of portable property.
Instrumentalities of Transportation and Communication
A category of the Nationwide Definition that includes several different classes of Inland Marine, including bridges, tunnels, pipelines, etc.
Acceptability of an applicant for insurance to the insurance company.
Common title for head of state department of insurance (called "Director" in some states).
A contract, a legal document, which establishes the terms of agreement between the insurer and insured.
The section of an insurance policy that states which losses will be indemnified, what property is covered, which perils are insured against.
ISO (Insurance Services Office)
An organization, made up of member companies, that analyzes statistics collected from members and then establishes and files standard rates for many lines of insurance. Also develops and files standardized policy forms on behalf of members.
A voluntary action to rid the ship of cargo in order to prevent further damages or peril.
legally enforceable obligation.
The term is most commonly used in a pecuniary (money-related) sense.
Insures the individual for financial losses that may arise out of the person's responsibilities to other imposed by law or contract.
Limits of Liability
The maximum amount of money the insurance company will pay for a particular loss, or for loss during a period of time.
A voluntary association of individuals, or groups of individuals, who agree to share in insurance contracts. Each individual or "syndicate" is individually responsible for the amounts of insurance it writes.
-Also known as Surplus Lines
The percentage of losses to premiums, usually losses incurred to premiums earned.
A form of Professional Liability insurance used to insure professionals including physicians, dentists, and druggists against their Liability for professional misconduct or lack of ordinary skill.
A form of insurance primarily designed to cover property in transport over land or sea.
A fact that, had the company known it, would have caused it to decline the risk or include entirely different provisions than those currently included.
Mercantile Open Stock Burglary Policy
Crime policy that covers the insured's merchandise, furniture, fixtures, and equipment against burglary.
In Crime insurance, any regular employee of the insured, who has care or control of the property outside the premises. Also includes the insured, a partner, or an officer.
The use of written or oral statements of the insured or insurance company misinterpreting the risk, terms, coverages, benefits, privileges, or estimated future dividends of any policy.
Monopolistic State Fund
A state insurance plan that prohibits competition by private carriers.
Ex: Worker's Compensation fund in some states.
Rights granted to a mortgagee (lender), under a property contract issued to a morgagor, by virtue of the morgagee's financial interest in the property
Technically, an insurance policy that insures against more than one Peril. More commonly, an insurance policy that provides coverage against both Property and Casualty perils.
Mutual Insurance Company (Insurer)
An incorporated insurance company, without capital stock, whose governing body is elected by the policyholders. The policyholders own the company and they might share in the success of the company through the dividends.
Vanishing of property with no known explanation
Any person, firm, or corporation, or any member thereof, specifically designated by name as insured(s) in a policy, as distinguished from the others who, though unnamed, are protected under some circumstances.
Named Peril Policies
Policies that insure against only the Perils named, contrary to All-Risk policies. Sometimes called "Specific Peril" policies.
Name Schedule Bond
Fidelity bond that covers each employee named in the policy schedule for the smount listed in the schedule.
National Flood Insurance Program
The federal government's program to provide Flood Insurance at subsidized rates.
A document designed to categorize and classify risks eligible for Ocean or Inland Marine insurance.
Failure to use that degree of care that an ordinary person of reasonable prudence would use under the same given circumstances. Negligence may be constituted by acts of either omission or commission or both.
A form of Automobile insurance mandated by law in many states whereby an insurance company reimburses its insured for auto losses, regardless of fault, and without resort to subrogation.
Nonowners Automobile Liability Insurance
Protection for the policyholder against claims for bodily injury and property damage liability caused by his/her employees or others using autos using autos not owned or hired by the insured while conducting business. A "Named Nonowner" policy protects an individual who drives only borrowed or rented cars.
An agent licensed in a state in which she is not a resident.
In bonds, the party of whom the principal makes the promise, and for whose protection the bond is being written.
Type and character of the use of property in question
Impairment of health caused by continued exposure to conditions inherent in a person's occupation or a disease caused by or resulting from the nature of an employment.
Ocean Marine Insurance
Marine insurance designated to provide broad coverage for cargo and ships in transit over sea. Includes Cargo Insurance, Hull Insurance, and Liability coverage (Protection and Indemnity).
The existance of another contract covering the same interest and Perils. Sometimes called Pro-Rata Liability, because the insurers pay claims according to the proportion of premiums paid to each.
-Remember, you can't collect in total more than you lost.
Owners and Contractors Protective Liability
Part of a Commerical General Liability policy that protects an owner or general contractor against liability arising our of the acts of contractors or subcontractors. It is also known as Independent Contractors Liability coverage.
Pair and Set Clause
A clause found in various Property insurance contracts that states that when part of a set is damaged or destroyed the insured is not entitled to reimbursement for the entire set. Policies provide various methods for determining the amount of reimbursement.
-Fine Arts Floaters do not contain this clause.
A loss that does not either:
1) Completely destroy or render worthless the insured property, or,
2) Exhaust the insurance applying thereto.
A Surety Bond that guarantees a job will be completed by the contractor according to contract specifications.
Personal Articles Floater
Personal Inland Marine insurance that provides All-Risk coverage on nine optional classes of personal property: Jewelry, furs, cameras, musical instruments, silverware, golf equipment, fine arts, stamp collections and coin collections.
Personal Auto Policy
Easy-to-read auto policy that provides broad coverage for both owned and non-owned autos that are used, maintained, and/or operated by the insured and family.
Personal Injury Coverage
Liability coverage for the third-party claims for damages that are other than physical, such as libel, slander, false arrest, wrongful eviction, invasion of privacy, etc.
Insurance coverages intended to protect individuals and their families.
Personal Property Floater
Personal Inland Marine floater that provides All-Risk coverage on unscheduled personal property.
Personal Yacht Insurance
A form of Ocean Marine insurance available to individuals who own large boats. Provides both Hull and Protection and Indemnity insurance.
In Auto Insurance, damage or loss to the insured's own autos or autos in the insured's care, custody, or control.
Position Schedule Bond
Fidelity Bond that lists covered job categories, each with a separate amount of insurance, rather than the individuals holding these positions. New employees hired in a scheduled position are automatically covered.
In Bonds, the party who promises to do (or not to do) a specific thing.
Private Passender Autos
Ordinary cars, station wagons and jeeps, utility autos, (pickups, panel trucks and delivery vans not used commercially), and utility trailers designed to be pulled by a private passenger auto.
Products and Completed Operations
A form of General Liability insurance that covers a company against liability arising out of its products (a manufacturer) or its completed operations (a contractor or architect).
Liability arising out of the rendering or failure to render services of a professional nature.
Proof of Loss
A formal statement bu the insured to the insurance company regarding a loss. The purpose is to palce before the company sufficient information concerning the loss to enable it to determine its liability under the policy.
A type of loss covered under many Liability contracts. Includes the insured's liability for damage to property of others or loss of use of other's property.
Insurance that indemnifies a person with an interest in property for its loss.
Pro-Rata Liability Clause
Clause in a Fire Policy that provides a method of sharing loss when more than one policy is applicable. Each company covers no more than its share. Also known as the Other Insurance Clause.
The termination of a contract with premium charge being adjusted in proportion to the exact time the protection has been in force. All unearned premium is returned to the insured.
Protection and Indemnify
In Ocean Marine Insurance, a form of Liability insurance.
The per-unit cost of insurance
Rates and Premiums Setting
The chance of a loss for risk is a combination of the probably frequency of loss and the probably severity of loss, based on accumulated data for similar risks. In the absense of reasonably accurate projections of potential losses, insurance companies would have no basis for setting rates and premiums.
Giving or offering a benefit other than those specified in the policy, to induce a customer to buy insurance.
An unincorporated group of subscribers that exchange insurance responsibilities with other members. Managed by an "attorney-in-fact."
Process of removing property for the purpose of preserving it from Peril insured against. Property contracts provide coverage for loss to property during removal.
-Ex: During a fire, you remove your furniture from your dwelling, exposing it to other risks.
The continuation in full force and effect of a policy that is about to expire.
An indirect Property coverage available under the Dwelling and Homeowners policies, also available with certain Commercial contracts, that reimburses the insured for rents lost when rented property is damaged by a Peril insured against.
Replacement Cost (R/C)
The cost of replacing property without deduction in depreciation
Facts that the applicat represents as true and accurate to the best of his/her knowledge and belief.
In an Umbrella Liability policy, the amount of the insured must pay for a loss not covered by an underlying policy, before the Umbrella will begin to cover losses.
In Crime insurance, the forcible and felonious taking of property by violence or threat of violence from a messenger or custodian.
Safe Burglary Policy
A Crime insurance policy that is designed to cover burglary of property from a sage or the felonious removal of the entire safe from the premises.
Property taken over by an insurance company to reduce its loss. The company may dispose of salvage property as it wishes, but on the request and proper reimbursement, may return it to the insured.
A fund established under Worker's Compensation laws in most states to help pay any increased compensation that may result when an employee with a previous injury is injured again.
A percentage penalty charged on insurnace, canceled by the insured, before the end of the policy period. Return premium is calculated on a Short-Rate basis, meaning the insurance company keeps a portion of the unearned premium to cover exenses.
A representative who helps an agent or broker solicit and collect premiums. A solicitor may neither bind nor countersign policies.
Insurance contract written to insure item of property for a specific amount of insurance. Used in insuring hard-to-value intems, such as fine arts.
Stock Insurance Company
An incorporated insurance company with capital divided into shares and owned by the shareholderes. Profits are shared by the stockholders. Policyholders are NOT entitled to share in company profits.
The transfer to the insurance company of the insured's right to collect for damages. After paying a claim, the company stands in place of the insured in suing the negligent party, thus preventing the insured from collecting twice.
Found in most Liability contracts. Supplementary Payments provide "extra" coverage over and above the insured's Limit of Liability. Included are first aid, bond premiums, accrued interest on judgements, etc.
The part (often the insurance company) that agrees to be responsible for loss which may result if the principle does not keep his promise.
A bond that guarantees that someone will perform faithfully whatever he or she agrees to do or that someone will make an agreed upon payment to another party. In a Surety Bond, there are three parties:
1) Principal - who has agreed to perform the obligation
2) Obligee - For whose benefit the Bond is written
3) Surety - The insurer that provides the bond in considerations for the premium paid.
Any act of stealing.
-Includes: Larceny, burglary, and robbery
Provides protection for Indirect Loss that occurs when, following a Direct property loss, there is a time lapse before the property can be used again.
-Includes Business Income, Contingent Business Income, and Extra Expense
Trip Transit Policy
An Inland Marine transportation policy, similar to the Annual Transit policy, but designed to cover a specific shipment.
Underinsured Motorist Coverage (UIM)
Coverage on an Auto policy that stacks coverage for an insured onto inadequate coverage of an individual who negligently caused injury to that insured.
Umbrealla Liability Policy
Provides broad coverage for an insured's liability over and above liability covered by underlying contracts or retention limits.
The process of evaluating a risk for the purpose of issuing insurance coverage on it.
Uninsured Motorist Coverage (UM)
Automobile Coverage designed to provide Bodily Injusry protection for the insured should be invovled in an accidenti in which the driver at fault has no insurance the cover the loss.
The absense of person, return expected. Property coverage on a building is sometimes restricted when there are long periods of vacancy, but not unoccupancy.
Utmost Good Faith
A principle of insurance which states that the insurance company must be able to rely on the honesty and cooperation of the insured, and the insured must rely on the company to fulfill its obligations in good faith.
The absense of people and personal property from a building, not expected to return. Property coverage is often restricted when there are long periods of vacancy, especially for the Perils of Vandalism and Glass Breakage.
Vandalism and Malicious Mischief (VMM)
Protects property against damage caused by vandals. May be added by Endorsement to the DP-1 Basic Form; included coverage in many other Property forms.
Imposed in some states upon a person even though he is not a party to the particular occurence.
Ex: The owner of a motor vehicle might be vicariously responsible for injuries even though he is not driving the car at the time of the occurrence.
1) A statement that is guaranteed to be true in all respects. Statements on insurance applications are, in the absense of fraud, not warranties, but representations (statements true to the best of the applicant's knowledge).
2) A sworn statement by the insured attesting to the presence of certain safeguards, such as a sprinkler or burglar system. Breach of this type of warranty may void coverage.
Worker's Compensation Insurance
Insurance that covers an employer's obligations under Worker's Compensation law, which make the employer's responsible for stated damages in the event of a work-related injury or illness. Worker's Compensation coverage also includes separate coverage for Employers Liability.
An exclusion often found in Commercial General Liability policy that excludes liability for explosions, collapse, or underground hazards.