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Casualty insurance b
Casualty principles and concepts
| Term | Definition |
|---|---|
| Declarations | Who,what,where,when an how much a policy is |
| Insuring agreement | Summarizes covered risks |
| Conditions | Lists the insureds responsibilities both at the time of application and time of loss |
| Exclusions | Lists the hazards and perils not covered by the policy |
| Supplementary | Payments the insurer will pay over policy limits such as claim expenses, legal fees |
| Policy period | Loss must occur between policy inception and cancellation |
| Policy territory | In ,commercial lines it's a list of states the company does business in |
| Non concurrency | When 2 or more policies do not cover a risk in the same way at the same time |
| Primary insurance | Is the main coverage on a risk |
| Excess insurance | Starts when the underlying policy's coverage ends |
| Pro rata | If a loss occurs that is covered by more than one policy ,each policy pays it's portion of the loss |
| Policy limits | The maximum life time benefit of an insurance policy |
| Coinsurance | A clause which requires the insured to keep insurance equal or greater than the stipulated percentage of full value .insurance carried ÷ amount of insurance needed ×amount of loss |
| UNOCCUPENCY | Buildings that have no residents or active business for more than 60days |
| Vacancy | Buildings that are both unoccupied and have no personal property |
| Appraisal | In the event of a disagreement over the insureds handling of a claim. The insured and the insurer may select an appraiser |
| Assignment | To transfer the policy to someone else |
| Abandonment | Property cannot be abandoned to the inurer |
| Duty to defend | The insurer has the responsibility to defend the insured against lawsuits |
| Liberalization | If the insurer changes the same type of policy the insured owns in any way. , providing for more coverage without additional premium the insureds original policy will be extended for those coverages |
| Subrogation | The insurer has the right to pursue legal action in its own name, or the name of a policy holder against a third party who is liable for a loss that has been paid |
| Salvage | The insurer may pay the cost to replace or repair damaged property |
| No benefit to the bailee | Someone that holds property of another and is responsible for its safe return. They will not receive payment for coverage of the insureds property . |
| Judgment rating | Premium is determined without manuals or tables. Rather the underwriter evaluates the individual risk to determine the probability of loss |
| Manual rating | This method separates risks into category groupings or classes . |
| Merit rating | Takes particular aspects of the individual risk into account |
| Negligence | Failure to act in a reasonable manner |
| Assumption of risk | A person who understands the danger involved in a particular activity and voluntarily chooses to do the activity anyway |
| Contributory negligence | Any negligence on the part of an injured party will normally defeat a claim |
| Mississippi rule | Any defendant who is partly at fault must pay in proportion to their share of the fault |
| Wisconsin rule | Used in most states the defendant who is least at fault is not required to pay for any of the damages |
| Intervening cause/last clear chance | The injured party would be able to collect damages even if she /he had contributory negligence if the other party had a opportunity to avoid the accident |
| Statue of limitations | Time limit on how long an injured person can sue for damages |
| Common law fellow servant rule | An employer cannot be held liable for the actions of a coworker if an employee is injured due to the negligence of that coworker |
| Special or specific damages | The actual expenses incurred by an individual or entity as the result of lost wages or income , medical bills or damaged property |
| General damages | Damages due to pain, suffering, mental anguish |
| Punitive damages | Damage that are assessed in edition to general and specific damages as a punishment for extreme or gross negligence by the offending and liable damages |
| Absolute /strict liability | A legal doctrine that states that an individual can be held liable even if negligence does not exist or cannot be proven. Strict liability is workman's comp Absolute liability is dangerous activities |
| Vicarious liability | Arises out of imputed negligence in which one individual becomes liable for the negligent behavior of another |
| Blanket policy | Covers a class of objects or perils |
| Specific policy | Covers only those objects or perils named in the policy |
| Proof of loss | A sworn statement made by the insured verifying the amount, date and cause of loss |
| Per occurance (accident )limits | Amount available for any individual loss or claim up to the aggregate limits unless the aggregate limits have been met |
| Per person limits | The amount available for any one person through the policy. |
| Split limit | Similar to per person limits , in a split liability amount coverage is a different amount fo different things. Example 20,000 bodily 8injury per person, 40000 bodily injury per occurance, 150000 property damage per occurance |
| Acceptable with standard rates | The insurance policy will be issued as applied for, subject to full premium payments |
| Acceptable with substandard rates or with exclusion | The policy will be issued, but the insured must sign an endorsement showing he or she accepts the changes |
| Unacceptable and denied coverage | If the insurer denies coverage to applicant the insurer denies coverage to an applicant. The insurer must give detailed explanation |
| Loss ratio | One way of measuring the insurers profitability. It takes claim expenses and compares them to premiums |
| Comparative negligence | More lenient and used by more states,can be used in some way to lessen the damages |
Created by:
Jenny10795
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