C82 General Insurance Essentials Vol. 2

Front 1

Actual Cash Value

Back 1

The replacement value of the property less any accumulated depreciation.

Hint 1

ACV

Front 2

Bailees

Back 2

Persons to whom goods are entrusted by someone else. They may have them for safekeeping or to perform work on them for some other valid reason

Hint 2

entrusted

Front 3

Bailors

Back 3

Persons who entrust goods to another.

Hint 3

goods to another

Front 4

Business Interruption

Back 4

Gross earnings is to replace earnings. Example…your restaurant burns down and you have the best chef in town. If you cannot pay him while the building is being re-built he will go elsewhere and you will not do good business when your restaurant is open. Pay him and he stays. The re-imbursement period to the insured ends when the business is re-opened because now you are earning money to pay him. 80% co-insurance clause.

Profits: when the restaurant is closed you lose your profits. The policy will reimburse you until your profits are where they should have been if the loss had not happened. Example. Your store burns in October they can’t re-build until February. You miss Christmas…Your profits at Christmas would have been higher than in October…by February you should have had more money…we will pay you until your profits are where they should have been only to a maximum of 12 months.

Hint 4

GE or Profits

Front 5

Codified Law

Back 5

Statute law which is classified and arranged in a systematic collection or code. It is written law.

Hint 5

Systematic or collection

Front 6

Compensatory Damages

Back 6

Special damages and general damages collectively are considered compensatory damages. They compensate the plaintiff for some kind of a loss.

Hint 6

compensate

Front 7

Consideration

Back 7

That which one party gives or promises to give in exchange for the act or promise of the other, in other words, consideration is the price agreed upon.

Hint 7

exchange the act or promise

Front 8

Contract

Back 8

An agreement enforceable at law.

Hint 8

an agreement

Front 9

Contribution

Back 9

The sharing of loss or liability between two or more insurance companies covering the same risk.

Hint 9

sharing of loss

Front 10

Damages

Back 10

A sum of money claimed or awarded as compensation for loss or injury.

Hint 10

sum of money

Front 11

Estoppel

Back 11

A doctrine of law which precludes a person from denying the truth of a statement formerly made by him or her or the existence of a series of facts which has caused someone to draw certain logical conclusions.

An estoppel arises when a person is forbidden by law to speak against their own act or deed. A man's own act or acceptance stops or closes his mouth to prevent him from arguing the opposite

Hint 11

forbidden by law to speak against their own or deed

Front 12

Fire Wall

Back 12

A barrier wall between buildings or parts of buildings. Certain standards apply. It must have a specified fire resistance rating, minimum openings, must extend above the roof and beyond the ends of the building and have specified strength and stability.

Hint 12

A barrier wall

Front 13

Forfeiture

Back 13

The loss of a right as a result of the nonperformance of some obligation or condition.

Hint 13

the loss of a right

Front 14

Friendly Fire

Back 14

A fire intentionally kindled in a place provided for it. No matter how furious that fire may become, no matter how much heat and smoke it may give off, as long as it does not leave the place provided for it, it is still friendly fire.

Hint 14

intentionally kindled fire

Front 15

General Damages

Back 15

Less definite and are awarded for such things as pain and suffering, total or partial disability and disfigurement.

Hint 15

g d

Front 16

Inherent vice

Back 16

A quality within an object that makes it tend to destroy itself.

Hint 16

within an object to destroy itself

Front 17

Legal Liability

Back 17

Responsibility at law or liability assumed under contract.

Hint 17

responsibility at law

Front 18

Legal Person

Back 18

One who can be sued.

Front 19

Misrepresentation

Back 19

An incorrect statement made about a material fact. It can also include an omission of certain facts.

Hint 19

incorrect statement

Front 20

Negligence

Back 20

Doing something that a reasonable person would not do or omitting to do something that a reasonable person would do.

Hint 20

reasonable person or omitting to do something

Front 21

Non-disclosure or Concealment

Back 21

The withholding of information pertinent to a risk. It is silence when there exists an obligation to speak.

Hint 21

withholding of information

Front 22

Non-Waiver Agreement

Back 22

An agreement between two parties recognizing that there is a possible right (such as to deny liability) but in the interests of both parties, a note will be made of it and the matter allowed to proceed without prejudice to either party.

Front 23

Personal Injury

Back 23

Represents injury to a person's character. Do not confuse with bodily injury which is injury to the physical person.

Hint 23

injury to a person's character

Front 24

Precedent

Back 24

A legal decision serving as an authoritative rule in future similar cases.

Hint 24

authoritative rule in future cases

Front 25

Prescription

Back 25

A time, after which a cause of action ceases.

Hint 25

a cause of action ceases

Front 26

Proximate Cause

Back 26

The immediate and effective cause of the loss, not necessarily the last event before the occurrence, which, in a chain of circumstances leads naturally and directly in the ordinary course of events to the loss.

Front 27

Punitive or Exemplary Damages

Back 27

Intended as a punishment against the defendant and as a deterrent to others.

Hint 27

punishment

Front 28

Reinsure

Back 28

To insure again by transferring to another insurance company all or part of a liability assumed. In other words, reinsurance can be said to be the insurance of insurance companies.

Hint 28

transferring to another insurance company

Front 29

Salvage

Back 29

Property saved from loss. Can also be used as a verb to indicate the process of taking steps to reduce the amount of a loss.

Hint 29

property saved from loss

Front 30

Special Damages

Back 30

Money claimed or awarded for out-of-pocket items such as medical expenses, loss of earnings or damage to property substantiated by a specific invoice or estimate of repair.

Hint 30

money claim awarded for out of pocket items such as medical expenses

Front 31

Statute

Back 31

An agreement enforceable at law.

Hint 31

legislation by law given

Front 32

Statute of Limitations

Back 32

A statute prescribing the limitations to the right of action on certain described causes of action; that is, declaring that no suit shall be maintained on such causes of action unless brought within a specified period after the right arose.

Hint 32

statue prescribing limitations

Front 33

Subrogation

Back 33

The legal process by which an insurer who has paid a loss pursues any rights of recovery against a responsible third party.

Hint 33

legal process which insurer whos paid loss pursues to any rights of recovery

Front 34

Tort

Back 34

A legal wrong.

Front 35

Utmost Good Faith

Back 35

Absolute and perfect candor or openness and honesty. It is perfect good faith, concealing nothing.

Front 36

Valuable Papers

Back 36

Includes various types of records, papers and films.

Front 37

Valued Contract

Back 37

A contract that insures property for an amount which is agreed to by the insurer and the insured at the time the contract is made. It states that in the event of a total loss a specified amount will be paid to the insured.

Front 38

Void Contract

Back 38

A contract which never had any legal existence. It cannot be enforced.

Front 39

Waiver

Back 39

The voluntary relinquishment of a known right.

Front 40

Cedes

Back 40

assigns, grant, surrender, interest or right