Insurance

Front 1

Accident

Back 1

a sudden, unforeseen, unintended and unplanned event (e.g., a roof collapses due to the weight of ice and snow)

Front 2

Occurrence

Back 2

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)

Front 3

Cancellation

Back 3

the termination of an insurance policy before the expiration date

Front 4

Pro-Rata Cancellation

Back 4

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

Front 5

Short-Rate Cancellation

Back 5

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

Front 6

Peril

Back 6

a cause of potential loss such as an accident, fire, explosion, flood, negligence, and theft.

Front 7

Hostile Fire

Back 7

An uncontrollable fire or one that breaks out from where it was intended to be

Front 8

proximate cause

Back 8

the immediate cause that sets the other causes in operation (based on proximity)

Front 9

Binder

Back 9

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

Front 10

Arbitration

Back 10

the process where a disputed claim is decided by a neutral third party (used to resolve differences between insured and insurer)

Front 11

salvage (right of salvage)

Back 11

the right of the insurer to take possession of damaged property after a loss is paid. The salvage belongs to insurer

Front 12

Endorsements

Back 12

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.

Front 13

concurrent causation

Back 13

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)

Front 14

Nonconcurrency

Back 14

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)

Front 15

Unoccupancy

Back 15

a property that has contents by no occupants

Front 16

Vacancy

Back 16

a property that has neither occupants nor contents. May also be called vacancy clause.

Front 17

What are the two types of property losses?

Back 17

Direct loss and Indirect loss

Front 18

Direct loss

Back 18

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)

Front 19

Indirect Loss (consequential loss)

Back 19

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)