Unit 15 Insurance law (Okrent)

Comprehensive coverage

A package of coverage provided by a policy of comprehensive insurance that protects against a myriad of perils (collision, theft, etc)

Benefit

A payment made under an insurance policy, pension, annuity, or the like.

Insurance agent

A person authorized by an insurance company to represent it when dealing with third persons in matters relating to insurance.

Insured

A person protected by an insurance policy; a person whose property is protected by an insurance policy. One need not be the named insured (named in the policy) to be covered. A standard automobile insurance policy, for Example: usually covers any person operating the insured vehicle with the permission of the named insured.

Insurance broker

A person who acts as an intermediary between the insured and the insurer, who is not employed by an insurance company. The broker solicits insurance business from the public, and having obtained an order, either places the insurance with a company selected by the insured, or, if the insured does not select a carrier, then with a company of the broker's choice. Depending upon the circumstances, an insurance broker may represent either the insured, or the insurer, or both.

Adjuster

A person who makes a determination of the value of a claim against an insurance company for the purpose of arriving at an amount for which the claim will be settled. May be an agent for the insurance company or an independent adjuster.

Beneficiary

A person who receives a benefit

Cancellation clause

A provision in a contract that allows the parties to cancel the contract without obligation.

Preexisting condition clause

A provision in a health insurance policy that excludes from coverage, for a specified period of time, medical conditions that existed when the insured purchased the policy.

Rider

A sheet or sheets of paper, written or printed, attached to a document, that refer to the document in a manner that leaves no doubt of the parties intention to incorporate it into the document. Riders are most frequently used with insurance policies to make additions or changed to the original policy.

No-fault insurance

A type of automobile insurance required by law in many states, under which the insured is entitled to indemnification regardless of who was responsible for the injury or damage. Proof of negligence is not a condition of liability under such a policy.

Deductible

In insurance, portion of a loss that the insured must pay from his own pocket before the insurance company will begin to make payment. USAGE: "because my policy has a car $500, my insurance company will pay only $2,000 of the $2,500 damage to my car".

Replacement value

In the context of an insurance loss, the cost of replacing insured property at its current value, as opposed to its original cost; that is, what is costs now, not what it cost when it was purchased.

Indemnity policy

Indemnity insurance

Business interruption insurance

Insurance protecting against loss from the interruption of business, as distinguished from coverage upon merchandise or other property used in the business.

Indemnity insurance

Insurance providing indemnification for actual loss or damage, as distinguished from liability insurance, which provides for payment of a specified sum upon the occurrence of a specific event regardless of what the actual loss or damage may be.

Fire insurance

Insurance that indemnifies the insured against loss to property (Examples: a house, the contents of a house; a commercial building) due to fire.

Health insurance

Insurance that indemnifies the insured for medical expenses incurred as a result of sickness or accident.

Comprehensive insurance

Insurance that provides coverage for various risks (Example: fire; theft; flood; wind; hail), each of which could also be covered under separate policies.

Disability insurance

Insurance that provides income in the vent of disability.

Malpractice insurance

A type of liability insurance that protects professional persons (Examples: attorneys; physicians; psychotherapists) from liability for negligence and other forms of malpractice. it is also called professional liability insurance.

Proof of loss

A written statement of the dollar amount of a loss sustained, submitted by an insured. Proof of loss is a standard requirement of casualty insurance policies.

Insurance adjuster

Adjuster

Reinsurer

An insurance company's insurance company.

Marine insurance

An insurance policy covering the risk of loss to a ship or its cargo from the perils of the sea.

Title insurance

An insurance policy in which the insurer agrees to indemnify the purchaser of realty, or the mortgage, against loss due to defective title.

Homeowners policy

An insurance policy that insures homeowners against most common risks, including fire, burglary, and civil liability.

Umbrella policy

An insurance policy that provides coverage over and above the liability limitations of the insured's basic liability insurance policies.

Annuity policy

An insurance policy that provides for or pays an annuity.

Collision insurance

Automobile insurance that protects the owner or operator of a motor vehicle from loss due to damage done to his property by another.

Insurance binder

Binder

Insurable

Capable of being insured. Example: as a condition of purchasing life insurance, being in sound health at the time the policy is issued.

Double insurance

Coverage of the same risk and the same interest by different insurance companies.

Fraud

Deceit, deception, or trickery that is intended to induce, and does induce, another person to part with anything of value or surrender some legal right.

Insurer

Generally, an insurance company; that is, the party who assumes the risk under an insurance policy and agrees to compensate or indemnify the insured.

Insurability

Having the qualities needed to be insurable: no preexisting health conditions, nonsmoker, under certain ages, etc.

Personal liability

Liability to satisfy a judgment, debt, or other obligation from one's personal assets.

Straight life insurance

Life insurance in which the cash surrender value of the policy increases as the insured makes premium payments throughout her lifetime. Straight life insurance is also referred to as whole life insurance or ordinary life insurance.

Term life insurance

Life insurance that provides protection only for a stated number of years and has no cash surrender value.

Premium

Money paid to an insurance company for coverage by an insurance policy

Insurance premium

Money paid to an insurer for an insurance policy.

Self-insurance

Protecting one's property or business by establishing a fund out of which to pay for losses instead of purchasing insurance . Self-insurance is a means through which employers may provide workers' compensation and health coverage to their employees as an alternative to securing workers' compensation insurance and health insurance.

Insurance contract

The formal name for an insurance policy.

Waiver

The intentional relinquishment or renunciation of a right, claim, or privilege a person knows he has.

Contribution between insurers

The obligation of an insurance company that has issued a policy covering the same loss as that insured by another insurance company to contribute proportionally to the other insurer who has paid the entire loss.

Bad faith

a devious or deceitful intent, motivated by self interest, ill will, or a concealed purpose. The opposite of good faith. Bad faith is stronger than negligence, but may or may not involve fraud. Example: An insurance company engages in bad faith when it refuses, with no basis for its action, to pay a claim.

Insurable interest

an interest from whose existence the owner derives a benefit and whose nonexistence will cause her to suffer a loss. The presence of an insurable interest is essential to the validity and enforce-ability of an insurance policy because it removes it from the category of gambling contract.

Coinsurance

A division of the risk between the insurer and the insured. Example: a health insurance policy under which the insurance company is obligated to pay 80 percent of every claim and the insured pays 20 percent.

Material Misrepresentation

A fraudulent or deliberately inaccurate statement that is intended to cause, or causes, a person to act in reliance.

Group insurance

1. A contract providing life, accident, or health insurance for a group of employees. The terms of the contract are contained in a master policy; the individual employee's participation is demonstrated by a certificate of insurance that she holds. 2. A contract providing life, accident, or health insurance for any defined group of people. The contract is a master policy and is entered into between the group policyholder

Exclusion

1. A provision in an insurance policy that removes a specified risk, person, or circumstances from coverage.

Annuity

1. A yearly payment of a fixed sum of money for life or for stated number of years. 2. A right to receive fixed periodic payments (yearly or otherwise), either for life or for a stated period of time.

Binder

1. An intern memorandum, used when an insurance policy cannot be issued immediately, evidencing either that insurance coverage is effective at a specified time and continues until the policy is issued, or that the risk is declined and giving notice of that fact. 2. An earnest money deposit that preserves a buyer's right to purchase real estate.

Indemnification

1. The act of indemnifying or being indemnified 2. Payment made by way of compensation for loss

Risk

1. The chance of loss or injury; the hazard or peril of loss that is protected by an insurance policy. Example: fire,flood;sickness 2. A gamble; a peril

Indemnify

1. To compensate or reimburse a person for loss or damage. 2. To promise to compensate or reimburse in the event of future loss or damage.

Insure

1. To enter into a contract of insurance as an insurer; to issue an insurance policy. 2. To guarantee

Double indemnity

A benefit payable under an insurance policy at twice face value if loss occurs under certain conditions. EXAMPLE: under a life insurance policy, the death of the insured by accidental, as opposed to natural, causes.

Disability clause

A clause in an insurance policy providing for a waiver of premiums in the event of the insured's disability.

Insurance company

A company engaged in the business of issuing insurance policies.

Insurance carrier

A company engaged in the business of issuing insurance policies; an insurance company.

Insurance

A contract (the policy) by which one party (the insurer), in return for a specified consideration (the premium), agrees to compensate or indemnify another (the insured) on an account of loss, damage, or liability arising from an unknown or contingent event (the risk). There are almost as many kinds of coverage as there are risks.

Life insurance

A contract (the policy) in which the insurer, in exchange for the payment of a premium, agrees to pay a specified sum to a named beneficiary upon the death of the insured.

Reinsurance

A contract between two insurance companies under which the second company (the reinsurer) insures the first company (the insurer) against loss due to policyholder's claims.

Insurance policy

A contract to compensate or indemnify a person for loss arising from a contingent occurrence.

Workers' compensation insurance

State statutes provide for the payment by the employer of compensation to employees injured in their employment or, in case of death, to their dependents, without the need to prove any negligence on the part of the employer.

Whole life insurance

Straight life insurance or ordinary life insurance, as opposed to term life insurance or group insurance.

Cancellation

The act of a party to a contract ending the contract after the other party has been guilty of breach of contract. Should be contrasted with termination, which provides the party ending the contract with fewer remedies.

Subrogation

The substitution of one person for another with respect to a claim or right against a third person; the principle that when a person has been required to pay a debt that should have been paid by another person, she becomes entitled to all of the remedies that the creditor originally possessed with respect to the debtor. (EXAMPLE: Aft er the insurance company that insures Lloyd's car indemnifi es him for the damage done to his car by Mary's negligence, the insurance company has the same cause of action against Mary as Lloyd originally had.) Subrogation is sometimes referred to as substitution. ■ n. displacement, substitution, transfer, transference, exchange, switch, supplanting