Part 2

Front 1

Contract Law

Back 1

Pertains to the enforcement and formation of contracts.

Front 2

Tort Law

Back 2

Torts are civil wrongs; they’re not crimes or breaches of contract.

They result in injuries or harm that constitute the basis of a claim by a third party.

Front 3

Contract of Utmost Good Faith

Back 3

Both parties bargain in good faith when forming and entering into the contract. The two parties rely upon the statements and promises of the other and assume no attempt to conceal or deceive has been made.
Applicants are required to make full, fair, and honest disclosure.

Front 4

Estoppel

Back 4

A legal defense tool used when someone reneges on or contradicts a previous agreement or claim. Estoppel prevents someone from arguing something contrary to a claim made or act performed by that person previously.

Conceptually, it is meant to prevent people from being unjustly wronged by the inconsistencies of another person’s words or actions.

Front 5

Hold Harmless Agreement

Back 5

A contractual agreement that transfers the liability of one party to another party; it is used by landlords, contractors, and others as a way to avoid or reduce risk.

Front 6

Parole Evidence Rule

Back 6

A written contract may not be altered without the written consent of both parties.

Front 7

Waiver

Back 7

Voluntary surrender of a known right, claim or privilege

Front 8

Underwriter

Back 8

The underwriter’s primary responsibility is the selection of risks to be insured. The underwriter also determines the classification, and premium rate if a risk is accepted by the insurer.

Underwriting protects the insurer against adverse selection and risks that are more likely than average to suffer losses.

Front 9

Replacement Value

Back 9

The cost to replace or repair the damaged property (not exceeding policy limits) with property of like kind and quality, at current pricing, without a deduction for depreciation. Many property policies providing loss valuation at replacement value require covered property to be insured to a certain percentage of its replacement value, such as 80% or 90%.
Note: The Replacement Cost method of loss valuation requires that the coverage amount at the time of the loss be at least equal to 80% of the cost of replacement.

Front 10

Actual Cash Value (ACV)

Back 10

The cost to repair or replace property at its replacement value, minus depreciation.
Example: A building has a roof with a 20-year life expectancy destroyed by hail 5 years after its installation, and the cost to replace the roof at the time of the loss is $10,000. The current replacement value of $10,000, less depreciation of $2,500 (25%), equals the actual cash value of $7,500.