Auto Insurance, Property Loss, and Life Insurance Terms and Definitions, Quizzes of Business and Labour Law

Download Auto Insurance, Property Loss, and Life Insurance Terms and Definitions and more Quizzes Business and Labour Law in PDF only on Docsity! TERM 1 loss exposure DEFINITION 1 any condition or situation that presents a possibility of loss, whether or not an actual loss occurs TERM 2 cause of loss DEFINITION 2 the actual means by which property is damaged or destroyed TERM 3 Property loss exposure DEFINITION 3 a condition that presents the possibility that a person or an organization will sustain a loss resulting from damage (including destruction, taking, or loss of use) to property in which that person or organization has a financial interest. TERM 4 Real Property DEFINITION 4 tangible property consisting of land, all structures permanently attached to the land, and whatever is growing on the land. TERM 5 Personal Property DEFINITION 5 all tangible or intangible property that is not real property. TERM 6 liability loss exposure DEFINITION 6 1. any condition or situation that presents the possibility of a claim alleging legal responsibility of a person or business for injury or damage suffered by another party TERM 7 Damages DEFINITION 7 1. money claimed by, or a monetary award to, a party who has suffered bodily injury or property damage for which another party is legally responsible. TERM 8 General damages DEFINITION 8 a monetary award to compensate a victim for losses, such as pain and suffering that do not involve specific measurable expenses. TERM 9 special damages DEFINITION 9 1. a form of compensatory damages that awards a sum of money for specific, identifiable expenses associated with the injured persons loss, such as medical expenses or lost wages TERM 10 punitive damages DEFINITION 10 1. a payment awarded by a court to punish a defendant for a reckless, malicious, or deceitful act or to deter similar conduct; need not bear any relationship to a partys actual damages TERM 21 modified no fault plan DEFINITION 21 injured motorists collect economic losses from their own insurers through the PIP benefits mandated by the plan. After that, they can sue at-fault drivers for any economic losses that exceed the no-fault coverage limits. TERM 22 monetary threshold DEFINITION 22 In a no-fault system, a dollar limit in total medical expenses an injured victim must exceed before he or she is permitted to sue the other party TERM 23 verbal threshold DEFINITION 23 in a no-fault system, the designated criteria that are verbally set forth in the statute that limit the right to sue. TERM 24 add on plans DEFINITION 24 in a no-fault system, a plan that provides certain personal injury protection (PIP)-type benefits such as medical payments and disability coverages to injured victims, without regard to fault. TERM 25 choice no fault plans DEFINITION 25 in a no-fault system, a plan that gives the insured the option, at the time an auto insurance policy is purchased or renewed, of choosing whether to be covered on a no-fault basis. TERM 26 Personal injury protection (PIP) DEFINITION 26 Coverage that pays benefits, regardless of fault, for medical expense, income loss, and other benefits, resulting from bodily injury to occupants of a covered auto. TERM 27 subrogation DEFINITION 27 the process by which an insurer can, after it has paid a loss under the policy, recover the amount paid from any party (other than the insured) who caused the loss or is otherwise legally liable for the loss. TERM 28 Residual market DEFINITION 28 the term referring collectively to insurers and other organizations that make insurance available through a shared risk mechanism to those who cannot obtain coverage in the admitted market. TERM 29 Automobile Insurance Plans DEFINITION 29 plan for insuring high-risk drivers in which all auto insurers doing business in the state are assigned their proportionate share of such drivers based on the total volume of auto insurance written in the state. TERM 30 joint underwriting associations (JUAs) DEFINITION 30 organization that designates servicing insurers to handle high-risk auto insurance business; all auto insurers in the state are assessed a proportionate share of the losses and expenses based on their percentage of the voluntary auto insurance premiums written in the state. TERM 31 Reinsurance facility DEFINITION 31 a state-wide reinsurance pool to which insurers can assign premiums and losses for high-risk drivers; original insurers service the policies, but all insurers in the pool share the losses and expenses of the facility in proportion to the total auto insurance they write in that state. TERM 32 safe-driver insurance plans DEFINITION 32 plan that allows for lower basic premiums for accident free- driving records and a surcharge for accidents TERM 33 Named insured DEFINITION 33 a person, corporation, partnership, or other entity identified as an insured party in an insurance policys declarations page TERM 34 policy period DEFINITION 34 the timeframe, beginning with the inception date, during which insurance coverage applies TERM 35 Vehicle Identification Number (VIN) DEFINITION 35 unique number that is assigned to each vehicle and that identifies certain vehicle characteristics TERM 46 arbitration DEFINITION 46 an alternative dispute resolution (ADR) procedure that takes a dispute to an impartial third party ( an arbitrator or arbitration panel) for a decision the parties agree will be final and binding. TERM 47 deductible DEFINITION 47 a portion of a covered loss that is not paid by the insurer. TERM 48 transportation expenses DEFINITION 48 coverage extension for substitute transportation costs incurred when a private passenger type auto has been stolen TERM 49 actual cash value DEFINITION 49 cost to replace property with new property of like kind and quality less depreciation. TERM 50 appraisal DEFINITION 50 a method of resolving disputes between insurers and insureds over the amount owed on a covered loss TERM 51 proof of loss DEFINITION 51 a statement of facts about a loss for which the insured is making a claim TERM 52 liberalization clause DEFINITION 52 a policy condition providing that if a policy form is broadened at no additional premium, the broadened coverage automatically applies to all existing polices of the same type. TERM 53 policy termination DEFINITION 53 the ending of the contractual relationship between the insured and insurer by cancellation, expiration, or nonrenewal. TERM 54 cancellation DEFINITION 54 termination of a policy, by either the insurer or the insured, during the policy term TERM 55 functional replacement cost DEFINITION 55 the cost of replacing damaged property with similar property that performs the same function but might not be identical to the damaged property. TERM 56 Building code effectiveness grading scale (BCEGS) DEFINITION 56 a rating classification based on the quality of a communitys building codes and the level of their enforcement; ranges from 1 to 10. TERM 57 inherent vice DEFINITION 57 a quality of or condition within a particular type of property that tends to make the property destroy itself. TERM 58 ensuing loss DEFINITION 58 the loss attributable to a subsequent peril that results from loss by an initial peril TERM 59 concurrent causation DEFINITION 59 a legal doctrine stating that if a property loss can be attributed to two or more independent concurrent causes- one or more excluded by the policy and one covered- then the policy covers the loss. TERM 60 insurable interest DEFINITION 60 an interest in the subject of an insurance policy that is not unduly remote and that would not cause the interested party to suffer financial loss if an insured event occurred. TERM 71 burden of proof DEFINITION 71 in a trial, the duty of a party to prove that the facts it claims are true. TERM 72 condominium or cooperative unit DEFINITION 72 housing unit in a complex owned by a corporation, the stockholders of which are the buildings residents; the corporation owns the real estate title; each unit owner owns corporation stock and has the right to occupy a specific unit TERM 73 moral hazard DEFINITION 73 a condition that increases the likelihood that a person will intentionally cause or exaggerate a loss. TERM 74 scheduled coverage DEFINITION 74 insurance for property specifically listed (scheduled) on a policy, with a limit liability for each item. TERM 75 special flood hazard area (SFHA) DEFINITION 75 area that the NFIP has classified as being expected to experience flooding at least once in 100 years. TERM 76 flood hazard boundary map DEFINITION 76 a temporary map designed to identify flood-prone areas in the community TERM 77 emergency program DEFINITION 77 initial phase of a communitys participation in the National Flood Insurance Program in which property owners in flood areas can purchase limited amounts of insurance at subsidized rates. TERM 78 flood insurance rate map (FIRM) DEFINITION 78 a map that shows exact boundaries for special flood hazard areas, the various flood zones, and base flood elevations. TERM 79 regular program DEFINITION 79 second phase of the National Flood Insurance Program in which the community agrees to adopt flood-control and land- use restrictions and in which property owners purchase higher amounts of flood insurance under the emergency program. TERM 80 Write-Your-Own Program DEFINITION 80 a program allowing private insurers to write flood insurance under the National Flood Insurance Program (NFIP) TERM 81 syndicate DEFINITION 81 a group of insurers or reinsurers involved in joint underwriting to insure major risks that are beyond the capacity of a single insurer or reinsurer; each syndicate member accepts predetermined shares of premiums, losses, expenses and profits TERM 82 difference in conditions policy DEFINITION 82 policy that covers on an all risks basis to fill gaps in the insureds commercial property coverage, especially gaps in flood and earthquake coverage. TERM 83 inland marine insurance DEFINITION 83 insurance that covers many different classes of property that typically involve an element of transportation. TERM 84 residence premises DEFINITION 84 the place where the insured resides as identified in the policy declarations. TERM 85 blanket basis DEFINITION 85 a basis for insuring all items within a single amount of insurance without specifically identifying each item. TERM 96 convertible DEFINITION 96 characteristic of a term insurance policy that allows the policy to be exchanged for some type of permanent life insurance policy with no evidence of insurability. TERM 97 whole life insurance DEFINITION 97 life insurance that provides lifetime protection, accrues cash value, and has premiums that remain unchanged during the insureds lifetime TERM 98 universal life insurance DEFINITION 98 flexible premium permanent life insurance that separates the protection, savings, and expense components. TERM 99 variable life insurance DEFINITION 99 a form of life insurance providing a death benefit that may change with time due to its variable cash value TERM 100 variable universal life insurance DEFINITION 100 a form of universal life insurance that allows the policyholder to make fund choices for the investment component but that has no guaranteed cash value and no guaranteed interest rate. TERM 101 term life insurance DEFINITION 101 life insurance that provides coverage for a specified period, such as ten or twenty years, with no cash value TERM 102 beneficiary DEFINITION 102 person(s) designated in a life insurance policy to receive the death benefit TERM 103 grace period DEFINITION 103 provision that continues a life insurance policy in force for a certain number of days (usually thirty or thirty-one) after the premium due date, during which time the policyowner can pay the overdue premium without penalty TERM 104 incontestable clause DEFINITION 104 clause that states that the insurer cannot contest the policy after it has been in force for a specified period, such as two years, during the insureds lifetime. TERM 105 nonforfeiture option DEFINITION 105 provisions in a life insurance policy that give the policyowner a choice of ways to use the cash value if the policy is terminated and that protect the policyowner from forfeiting the cash value TERM 106 reinstatement clause DEFINITION 106 a reinsurance treaty clause that reinstates the treatys original per occurrence for a predetermined premium, subject to a maximum recovery for the contract year. TERM 107 settlement options DEFINITION 107 various ways of paying life insurance policy proceeds to the beneficiary TERM 108 suicide clause DEFINITION 108 clause that states the insurer will not pay the death benefit if the insured commits suicide within a certain period (usually two years) after policy inception TERM 109 rider DEFINITION 109 similar to an endorsement; modifies a life insurance policy TERM 110 accidental death benefit DEFINITION 110 provision in a life insurance policy that doubles (or triples) the face amount of insurance payable if the insured dies as a result of an accident.