Property and casualty Insurance Terms and Related Concepts

What are he three types of hazards?

1. physical 2.moral 3.morale

What is a deductible in an insurance policy?

A specified dollar amount insured must pay on claim before the insurer will pay the policy benefits.

What is subrogation?

An insurer's legal right to seek damages from third parties after reimbursing insureds for a loss

And property insurance when must insurable interest exist

At the time of loss

What type of policy insures all property at multiple locations for a singe amount

Blanket policy

How is the actual cash value of a property calculated

Current replacement cost minus depreciation

How is the actual cash value of a property calculated?

Current replacement cost minus depreciation

If an insured peril was the proximate cause of loss, what type of loss is it?

Direct Loss

How are Direct and indirect losses related?

Direct losses can cause indirect losses.

How are direct and indirect losses related?

Direct losses can cause indirect losses.

What is negiligence

Failure to act as a reasonable, prudent person under given circumstances

Conditions that increase the chance of a loss are known as what?

Hazards

What provision states that if a policy allows for greater benefits than the financial loss incurred, the insured may be compensated only for the amount loss?

Indemnity

An insured's business is damaged by a fire, and temporarily shut down for repairs. As a result, the insured suffers loss of income. What type of loss is the loss of income?

Indirect or Consequential

An insured's business is damaged by fire, and temporary shut down for repairs. As a result, the insured suffers loss of income. What type of loss is the loss of income?

Indirect or consequential

what do individuals use to transfer risk of loss to a large group?

Insurance

What determines an insurer's responsibility for payment, as stated in an insurance policy?

Limits of liability

Insurance is a contract that protects the insured from what?

Loss

(Insurance carried divided by insurance required ) x loss amount =

Loss payment

An insurer discovers that an applicant for a policy has submitted a fraudulent insurance claim in the past. What type of hazard does this represent?

Moral

Under absolute liability, does an injured party need to prove negligence

No

Under absolute liability, does an injured party need to prove negligence?

No. Absolute liability exists when a condition or conduct is inherently dangerous, so proof of negligence is not required.

A policy that covers all causes of loss except for those specifically excluded is known as what type of policy?

Open peril (or special) form

What sublimit in a liability policy puts a ceiling on the payment for all claims that arise from a single accident?

Per occurrence

What is the term for the causes of loss insured against in an insurance policy?

Peril

What are the three types of hazards?

Physical, Moral, Morale

What term defines an exact direct, and interrupted cause of loss?

Proximate cause

In property insurance, what is actual cash value?

Replacement cost at the time of loss minus depreciation

What are the two types of compensatory damages?

Special and general

Wagering on a sporting event is known as what type of risk?

Speculative Risk

What type of limits of liability has the limits separately stated for different coverages?

Split Limits

If.a manufactured product is unsafe, what type of liability applies to the manufacturer?

Strict Liability

What law protects consumers from the circulation of inaccurate or obsolete information?

The Fair Credit Reporting Act

What is burglary?

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

Both robbery and burglary can be considered what?

Theft

In property insurance, what is the purpose of a coinsurance clause?

To encourage insureds to insure property close to its value

What does "indemnify" mean in insurance?

To restore an insured to the same financial status as before a loss

What is risk?

Uncertainty of loss

What is the difference between vacancy and Unoccupancy?

Vacancy refers to an insured structure in which no people have been living or working, and no property has been stored for the period of time. Unoccupancy refers to an insured structure in which no people have been living or working within the required period of time, but some property is stored.

What is the difference between vacancy and unoccupancy (non occupancy)

Vacancy refers to no people living or working and no property has been stored for specified period of time (usually 60 days ) . Unoccupancy refers to which no people have been living or working within the required of time, but some property is stored.

What type of policy insures all property at multiple locations for a single amount?

a blanket policy

If an insured peril was the proximate cause of loss, what type of loss is it?

direct

The reduction, decrease, or disappearance of value of the person or property insured in a policy is known as what?

loss

A person who does not lock the doors to his or her house shows an indifferent attitude. What type of hazard does this represent?

morale

What term describes a loss caused by continuous exposure to a condition?

occurrence

A tornado that destroys a property would be an example of what?

peril

A situation in which a person can experience only a loss and no gain presents what type of risk?

pure risk