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73 Cards in this Set

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1943 New York Standard Fire Policy
Traditionally referred to as the first standard property policy. Its provisions are incorporated into many state statues regarding minimum coverage that must be provided.
Actual Authority
Anything a principal authorizes the agent to do.
Agency
A legally recognized relationship between two parties in which one party - the principal - contracts with another - the agent - to act on the principal’s behalf.
Agent
Has a contract with an insurer to sell its products; is usually compensated by commission.
Agent As Adjuster
Some insurers give their agents the authority to settle small, first-party claims.
Aleatory Contract
Contract in which the amounts exchanged are not equal.
Alien Insurer
An insurance company that is organized under the laws of a foreign country.
Apparent Authority
The authority that a reasonable third party believes to exist in an agent of a principal.
Broker
with them. Serves as a conduit between insured and insurance company, directly by the insurer.
Casualty Insurance
Encompasses three general areas: liability; personal; and property. Originally, the term “casualty” meant insurance against losses from accidents (casualties).
Claims Process
The steps followed in the adjusting of a claim.
Conditions
One of the obligations of either the insured or the insurer imposed in the insurance contract.
Conformity To Statute
A policy provision that says the policy follows a state’s law if the law and policy language are in conflict.
Contract Of Adhesion
Contract drawn by one party and offered to another on a “take it or leave it” basis.
Declarations Page
Tells who is being insured; the time period; and the premium.
Direct Losses
The immediate consequence of the action of an insured peril; actual physical damage that results directly from an insured peril.
Direct Writer Agent
An agent that is an employee of an insurer, rather than as an independent holding contracts with an insurer (or insurers.)
Domestic Insurer
An insurance company that is organized under the laws of the state where it is also seeking to be licensed. Its “home state.”
Duty Of Accounting
The agent must account for any money entrusted to him by the principal.
Duty Of Loyalty
Owed by an agent to the principal - the agent must not do anything to harm the principal.
Duty Of Obedience
The agent must obey all lawful instructions from the principal.
Duty Of Reasonable Care
The agent must exercise the same degree of care as a reasonable and prudent person.
Duty To Give Information
The agent must keep the principal informed about any factors that affect the principal-agent relationship.
Exclusive Agent
An agent that has a contract with only one insurer. May or may not be an employee of the insurance company he represents.
FAIR Plan
A government program that offers property and crime insurance in the inner cities. Stands for Fair Access to Insurance Requirements.
Foreign Insurer
An insurance company that is organized under the laws of a state other than the state where it is seeking to be licensed.
Fraternal Insurers
Offer coverage only to members of a particular group.
Hazard
Something that increases the chance of loss from a peril.
Indemnify
To make whole again financially; to put the insured back into the same financial position he or she was in before a loss occurred.
Independent Adjuster
An adjuster who works for several companies on a contract basis.
Independent Agent
An agent that has contracts with several insurers. The agent has the right to place his customers with any insurer he wishes. “Owns” the expirations.
Indirect Losses
Arise out of direct losses, such as the income a business loses after a fire destroys its premises.
Inland Marine
Traditionally provides protection for property in transit over land, and today, to collections, personal property and other coverages for movable property.
Insurable Interest
The potential for financial loss associated with damage or destruction of property.
Insurance
A means of reducing risk by combining a sufficient number of exposure units to make their collective losses individually predictable.
Insurance Policy
The indemnity contract between an insured and an insurer.
Insuring Agreement
The insurer’s promise to provide the insurance in exchange for payment of the premium.
Law Of Large Numbers
The mathematical principle on which insurance is based. It says that the more exposure units in the mix, the easier it becomes to predict the group’s losses.
Lloyd’s Of London
An association of independent underwriters, each of whom personally guarantees to indemnify an insured for a certain percentage of the policy amount.
Loss
The loss of money or things worth money.
Marine Insurance
Insurance that covers property that is in some way related to transportation.
Marketing Representative
Serves as the “middleman” between insurers and their agents.
Moral Hazard
Arises out of the dishonesty of an insured. Is characterized by an indifference to loss on the part of the insured.
Mutual Companies
An insurance company “owned” by its policyholders.
Named Insured
The party or parties specifically named in an insurance contract, and shown in the declarations.
National Association Of Insurance Commissioners
An organization that is made up of the various states’ insurance commissioners. It works through these members to attempt to make the regulation of insurance more uniform from state to state.
Nationwide Marine Definition
Lists what may and may not be written as marine insurance.
Negligence
Failure to exercise the degree of care that a reasonable and prudent person would use under similar circumstances.
Ocean Marine
Provides protection for waterborne property.
Open Perils Policy
Covers all losses except those specifically excluded.
Other Insured Persons
Those to whom the policy extends protection.
Peril
Potential causes of loss.
Physical Hazard
An objective characteristic that increases the chance of loss.
Premium
The consideration paid by the insured in exchange for the insurer’s promise to indemnify.
Producer
Anyone who “produces” business for an insurer, such as an agent or broker.
Proof Of Loss
A sworn statement by an insured giving all the necessary information about a loss.
Property Insurance
Insurance that covers property at a fixed location.
Public Adjuster
Represents the insured in disputes with insurers over property claims.
Reciprocal Insurers
A group of individuals or firms who combine to pay each other’s losses.
Retention
A means where a company pays for its own losses. The preferred term for “self-insurance.”
Risk
Chance of an economic or monetary loss.
Self-Insurance
A means where a company pays for its own losses. The popular term for “retention.”
Social Insurance
A minimal level of protection provided by the government; participation is mandatory.
Solicitor
An employee of an agent with usually two functions: to sell insurance and to service existing accounts.
Staff Adjuster
An employee of an insurer who adjusts claims only for that company.
Stock Companies
An insurance company publicly traded and owned by shareholders.
Subrogation
A policy provision that allows an insurer to recover paid losses from others who are responsible for the loss.
Surplus Lines Broker
Specialized broker who finds markets for risks that have trouble getting insurance.
Underwriter
Selects which applications to accept and which to decline. Decides for which applicants an insurer should put its assets at risk.
Voluntary Insurers
Insurance companies that provide voluntary insurance coverage.
Warehouse To Warehouse Clause
This clause provides protection for the cargo from the time it leaves the first warehouse until it reaches its final destination point.
Wind Pool
A government program in coastal states to provide windstorm coverage.
Write Your Own (WYO)
A means where private insurers offer flood insurance that is reinsured by the Federal Government.