P&c Ins. Basic Terms

Front 1

a form of misrepresentation in which the agent convincesthe client to cancel already-existing insurance and buy another policyfrom the agent, to the detriment of the insured

Back 1

Twisting:

Front 2

This means that an insured cannot begiven a lower or higher rate than another insured in identical circumstances.It also means that the agent cannot accept a bribe from a client to provideinsurance or lower the premium.

Back 2

Unfair Discrimination

Front 3

Which department within an insurance company organization is typically responsible for helping to cover the insurer's exposure to loss?

Back 3

Reinsurance Department

Front 4

legal principle that states thatif one intentionally or unintentionallycreates the impression that a certain factexists, and an innocent party relies on thatimpression and is injured as a result, theguilty party may be legally prohibited fromasserting that the fact does not exist.

Back 4

Estoppel

Front 5

A contract where one party hasmore power than the other party in drafting the contract;

Back 5

Adhesion

Front 6

What does the liberalization clause do to a property policy?

Back 6

Broadens coverage

Front 7

Knowingly lying on an application in order to obtain coverage would be an example of

Back 7

Fraud

Front 8

Authority given by the principal tothe agent that is not formally expressed or communicated

Back 8

Implied authority

Front 9

Authority specifically given to an agent, either orally or inwriting, by the principal.

Back 9

Expressauthority

Front 10

Legal doctrine that states that anagent has whatever authority a reasonable personwould assume she has

Back 10

Apparent authority

Front 11

An insured owns 4 stores. As inventory is sold, the insured transfers new inventory from the other locations to the store making the sales. Which type of policy would best fit this insured's needs

Back 11

Blanket policy

Front 12

Type of liability imposed by law onthose participating in certain activities that are consideredespecially hazardous

Back 12

Absolute liability

Front 13

Liability that a person or businessincurs because of the actions of others, such as familymembers or employees; also called imputed liability

Back 13

vicarious liability

Front 14

The amount of payment that comes into play when an insured fails to carry the sufficient amount of insurance is sometimes referred to as the

Back 14

coinsurance penalty

Front 15

someone who has taken temporary custody of another person's property for a special purpose

Back 15

bailee

Front 16

The withholding of a material fact involvedin the contract on which the insurer relies

Back 16

Concealment

Front 17

is a written or verbal misstatement of a material factinvolved in the contract on which the insurer relies.

Back 17

Misrepresentation

Front 18

is the tendency for people with a greater-than-averageexposure to loss to purchase insurance

Back 18

Adverse selection

Front 19

is the right for an insurer to legally pursue a third party that caused an insurance loss to the insured. This is done as a means of recovering the amount of the claim paid by the insurance carrier to the insured for the loss.

Back 19

Subrogation