P&C Ch. 3 Vocab

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P&C Ch. 3 Vocab
2013-01-25 05:09:36

P&C Ch. 3 Vocab
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  1. declarations
    names of insured, address, value of policy, contents for the period of time stated in the contract
  2. insuring clause
    portion of contract that spells out the company's consideration
  3. conditions
    the rules that you and your company agree to follow in making the policy function as intended
  4. exclusions
    the part of the policy that eliminates coverage for items better covered else where, predictable losses, and catastrophic losses
  5. one line
    policies that only have one line of coverage (homeowners only)
  6. multi-line
    policies that have multiple lines of coverage (homeowners and auto)
  7. indirect loss or consequential loss
    loss that occurs after the initial loss
  8. specific basis
    covers losses only if the occur at a named address
  9. blanket basis
    covers losses if property no matter the location of loss
  10. perils
    causes of loss (active)
  11. named peril policy
    each peril that is covered is specifically names
  12. open peril policies (open perils)
    any loss is covered that is not excluded
  13. burden of proof
    have to prove that a loss is covered (the insured in a named peril policy and the insurer in an open peril policy)
  14. hazard
    any dynamic which increases the likelihood that a peril will occur or which magnifies the damage done by a peril. (inactive)
  15. actual cash value (ACV) 
    today's replacement cost minus the depreciation
  16. physical hazards
    slick floors, icy walks, etc
  17. moral hazards
    intentional losses
  18. morale hazards
    apathy, sloth, neglect
  19. actual cash value (ACV)
    today's replacement cost without subtracting depreciation
  20. functional replacement cost or repair cost
    in case of older buildings, this may apply, instead of replacing the old walls with horse hair plaster, it would be replace with dry wall
  21. agreed value
    value that the insurer and insured agree on before a loss occurs, different from stated value
  22. fair market value
    the standard valuation in real estate, but almost never used in insurance 
  23. deductibles
    amount of money that the insured has to pay in order to file a claim, a claim will not be filed until the deductible has been payed
  24. exlsusions
    things that are not covered in a loss
  25. coinsurance
    mechanism for rewarding policy owners who buy adequate amounts of coverage and punishing those who don't

    did / should * the loss - the deductible = payment
  26. policy period
    amount of time that the policy is in effect
  27. coverage territory
    will cover losses in a certain area
  28. mortgage holders
    the financial institution holding a mortgage on your property
  29. loss payable clause
    does not allow benefits to be paid to someone other than the policy owner, but it does not create immunity for the mortgagee in the event of dishonest acts on the part of the policy owner 
  30. cocurrent
    two or more policies that cover the same perils
  31. duties following a loss (insureds)
    •       notify the company promptly and police if the law was broken
    •       protect property from further damage
    •       inventory the damage
    •       allow the company to inspect and question you under oath
    •       if the insurance company requests formal proof of loss, complete the forms
    •       cooperate in the claims process
  32. basic perils covered in a loss
    • Fire
    • Lightning
    • Explosion
    • Windstorm or Hail

    • Riot or Civil Commotion
    • Vandalism
    • Volcanic Action
    • Vehicles or Airplanes
    • Smoke
    • Sprinkler Leakage
    • Sinkhole Collapse
  33. broad causes of loss
    • plumbing
    • falling objects
    • weight of snow, ice, or sleet
  34. collapse: the additional broad form
    • weight of rain
    • weight of people or personal property
    • hidden decay
    • hidden insect or vermin damage
    • defective methods of construction or materials if the collapse takes place at the time of construction