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19 Cards in this Set

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Accident
a sudden, unforeseen, unintended and unplanned event (e.g., a roof collapses due to the weight of ice and snow)
Occurrence
an event that results in an insured loss. This is a broader definition than accident because it also includes -continued and repeated exposure- (continuous exposure to a loss)
Cancellation
the termination of an insurance policy before the expiration date
Pro-Rata Cancellation
the cancellation of a policy for which a refund is made of the unearned premium calculated in proportion to the time the policy was in force
Short-Rate Cancellation
the cancellation of a policy for which the premium refund is calculated according to a short rate table in which the insurer retains a portion of the unearned premium
Peril
a cause of potential loss such as an accident, fire, explosion, flood, negligence, and theft.
Hostile Fire
An uncontrollable fire or one that breaks out from where it was intended to be
proximate cause
the immediate cause that sets the other causes in operation (based on proximity)
Binder
a temporary proof of insurance providing coverage until a policy is issued. The binder must include the perils covered, the amount of coverage, when coverage takes effect and the name of the insurer that is binding coverage. The premium amount would not be stated
Arbitration
the process where a disputed claim is decided by a neutral third party (used to resolve differences between insured and insurer)
salvage (right of salvage)
the right of the insurer to take possession of damaged property after a loss is paid. The salvage belongs to insurer
Endorsements
the policy may use endorsements to "broaden" or "restrict" coverage or to further define certain policy provisions. Endorsements must be made by the insurer, in writing, and attached to the policy. May also be called a rider, which is used to modify benefits.
concurrent causation
when a loss results from two causes, one of which is excluded and the other is not excluded, the loss is covered. (when you cannot separate the losses)
Nonconcurrency
when two or more policies cover the same property, each policy pays in proportion to the amount that policy's limit represents of the total of all insurance covering the property. If policies are nonconcurrent (containing different coverages) each policy covering a loss still pays only the percentage of the loss that its policy limit bears to the total of all policies. (not a good things, leaves gaps in coverage)
Unoccupancy
a property that has contents by no occupants
Vacancy
a property that has neither occupants nor contents. May also be called vacancy clause.
What are the two types of property losses?
Direct loss and Indirect loss
Direct loss
damage to property resulting from an insured peril (such as fire damage to an insured residence or the bursting of a water pipe causing water damage)
Indirect Loss (consequential loss)
a second financial loss which results from a covered direct loss (such as additional living expenses incurred when an insured residence is rendered uninhabitable by a fire, loss of rent, extra expense, and/or loss of business income)