Arbitration
>Settlement of a dispute by a person or panel chosen to listen to both sides and come to a decision
Right of Salvage
>The right of the insurer to take possession of damaged property after paying for its loss.
Salvage Value
>An estimate of an asset's value at the end of its useful life
Accident
>A sudden, unintended, and unplanned event from which damage results.
Occurrence
>An accident including continuous or repeated exposure to harmful conditions(also includes an accident)
Cancellation
>Termination of a policy before expiration; insurer or insured may cancel.
Pro-rata Cancellation
>Insurer refunds premium proportionately.
Short-rate Cancellation
>Insurer refunds after keeping funds to cover cost.
Flat Cancellation
>The cancellation of a policy on the effective date.
Nonrenewal
>Termination of policy at expiration.
Proximate Cause
>Primary event in an unbroken chain of events.
Hostile Fire
>A that burns outside its intended boundaries.
Friendly Fire
>A fire that stays within its intended bounds such as a fireplace.
Inherent Vice
>A quality in property that causes it to spoil, rot, or become defective.
Endorsement
>A policy form that alters or adds to the provisions of a property and casualty insurance contract.
Binder
>Proof of temporary insurance coverage until a policy can be issued.
-Issued for a maximum of 60 days
-Ends when a policy is issued
-Must include name of insurer
Concurrent Causation
>A loss is caused by two perils at the same time; one is excluded and the other is covered. Unless the policy specifies otherwise, the loss is covered.
Concurrency/Concurrent Policies
>Two policies provide the same type of coverage for the same risk; no gaps or overlaps in coverage exist.
Non-Concurrency/Non-Concurrent Policies
>Two policies cover a risk and do not have the sake coverage effective and expiration dates.
Deductible
>The portion of a loss not paid by the insurer and assumed by the insured.
Benefit to Insured
>As the deductible increases, the premium decreases.
Benefit to Insurer
>Fewer small claims are submitted.
Definitions
>Clarify policy language to resolve potential (and future) disputes between the insured and the insurer.
Bailee
>A person or organization taking into its possession, the property of another- usually for servicing repair or storage.
Bailor
>The owner of property held in the possession of a bailee.
Primary Insurance
>Responds first to a loss, regardless of all other insurance in the place on the same risk.
Excess Insurance
>Responds to a loss after primary insurance responds.
Unoccupancy
>Has no occupants, but does have contents.
Vacancy
>Building contains insufficient property or furnishings to support its intended occupance or use.
Robbery
>The taking of property from the care and custody of a person who has been caused or threatened with bodily harm.
Theft
>The broadest of the crime coverage's, theft includes any act of stealing.
Mysterious Disappearance
>The loss of property when the cause of loss is not known. This is NOT theft, burglary, or robbery.
Direct Loss
>Direct damage to covered property without an intervening cause.
Ex: Fire damage to an insured resident.
Ex: Water damage resulting from a ruptured pipe.
Indirect Loss
>Loss resulting from direct damage to covered property.
Ex: Additional living expenses or loss of rental income.
Named Peril
>Covers losses by perils that are specifically stated in the policy.
-Wind
-Fire
-Hail
Open Peril
>Cover losses caused by all perils except for those specifically excluded.
-Earth movement
-Flood
Loss Valuation
>A property policy pays for losses to property based on the valuation method contained in the policy or chosen by the insured in an endorsement added to the policy.
Replacement Value
>The cost to replace property with property of like kind and quality, at current pricing, without a deduction for depreciation. Many property policies providing loss valuation at replacement value require covered property to be insured to a certain percen
Actual Cash Value (ACV)
>The cost to repair or replace property at its replacement value, minus depreciation.
Agreed Value
> The insurance company and insured agree to a specific value of a particular property before the policy is issued. If a total loss occurs, the insurer will pay the Agreed Value.
Stated Value
>A valuation method that states the value of a particular property on the declarations page, but provides for the insurer to pay the lesser of the stated value or ACV of the property following a loss.
Valued Policy
>A policy that states the value of property as the amount shown on the Declarations page and will pay that full face value in the event of a total loss, regardless of the actual cash value.
Functional Replacement Value
> The cost to replace property with other property that performs the same function with similar efficiency, although the replacement property is not identical to the property being replaced. This valuation method is typically used with older property (suc
Market
>The price a willing buyer would pay for property purchased from a willing seller.
Frame
>A building that has a roof, floor, and supports of combustible material, usually wood, and combustible interior walls.
Joisted Masonry
>Buildings with exterior walls of masonry or fire-resistive construction rated for not less than one hour and with combustible floors and roofs.
Noncombustible
>The buildings and its walls, floors, and structural framework are constructed of noncombustible materials.
Masonry Noncombustible
>Buildings with exterior walls of masonry (not less than 4 inches thick) or made of fire-resistive construction with a rating of not less than one hour and noncombustible floors and roofs.
Fire Resistive
>The entire building and roof are constructed of reinforced concrete and steel. Must have at least a 2-hour fire resistive rating.
Modified Fire Resistive
>The materials used in the walls, floors, and roof of a structure must have a fire resistive rating of at least 1 hour, but less than 2 hours.
Arbitration
>Settlement of a dispute by a person or panel chosen to listen to both sides and come to a decision
Right of Salvage
>The right of the insurer to take possession of damaged property after paying for its loss.
Salvage Value
>An estimate of an asset's value at the end of its useful life
Accident
>A sudden, unintended, and unplanned event from which damage results.
Occurrence
>An accident including continuous or repeated exposure to harmful conditions(also includes an accident)
Cancellation
>Termination of a policy before expiration; insurer or insured may cancel.
Pro-rata Cancellation
>Insurer refunds premium proportionately.
Short-rate Cancellation
>Insurer refunds after keeping funds to cover cost.
Flat Cancellation
>The cancellation of a policy on the effective date.
Nonrenewal
>Termination of policy at expiration.
Proximate Cause
>Primary event in an unbroken chain of events.
Hostile Fire
>A that burns outside its intended boundaries.
Friendly Fire
>A fire that stays within its intended bounds such as a fireplace.
Inherent Vice
>A quality in property that causes it to spoil, rot, or become defective.
Endorsement
>A policy form that alters or adds to the provisions of a property and casualty insurance contract.
Binder
>Proof of temporary insurance coverage until a policy can be issued.
-Issued for a maximum of 60 days
-Ends when a policy is issued
-Must include name of insurer
Concurrent Causation
>A loss is caused by two perils at the same time; one is excluded and the other is covered. Unless the policy specifies otherwise, the loss is covered.
Concurrency/Concurrent Policies
>Two policies provide the same type of coverage for the same risk; no gaps or overlaps in coverage exist.
Non-Concurrency/Non-Concurrent Policies
>Two policies cover a risk and do not have the sake coverage effective and expiration dates.
Deductible
>The portion of a loss not paid by the insurer and assumed by the insured.
Benefit to Insured
>As the deductible increases, the premium decreases.
Benefit to Insurer
>Fewer small claims are submitted.
Definitions
>Clarify policy language to resolve potential (and future) disputes between the insured and the insurer.
Bailee
>A person or organization taking into its possession, the property of another- usually for servicing repair or storage.
Bailor
>The owner of property held in the possession of a bailee.
Primary Insurance
>Responds first to a loss, regardless of all other insurance in the place on the same risk.
Excess Insurance
>Responds to a loss after primary insurance responds.
Unoccupancy
>Has no occupants, but does have contents.
Vacancy
>Building contains insufficient property or furnishings to support its intended occupance or use.
Robbery
>The taking of property from the care and custody of a person who has been caused or threatened with bodily harm.
Theft
>The broadest of the crime coverage's, theft includes any act of stealing.
Mysterious Disappearance
>The loss of property when the cause of loss is not known. This is NOT theft, burglary, or robbery.
Direct Loss
>Direct damage to covered property without an intervening cause.
Ex: Fire damage to an insured resident.
Ex: Water damage resulting from a ruptured pipe.
Indirect Loss
>Loss resulting from direct damage to covered property.
Ex: Additional living expenses or loss of rental income.
Named Peril
>Covers losses by perils that are specifically stated in the policy.
-Wind
-Fire
-Hail
Open Peril
>Cover losses caused by all perils except for those specifically excluded.
-Earth movement
-Flood
Loss Valuation
>A property policy pays for losses to property based on the valuation method contained in the policy or chosen by the insured in an endorsement added to the policy.
Replacement Value
>The cost to replace property with property of like kind and quality, at current pricing, without a deduction for depreciation. Many property policies providing loss valuation at replacement value require covered property to be insured to a certain percen
Actual Cash Value (ACV)
>The cost to repair or replace property at its replacement value, minus depreciation.
Agreed Value
> The insurance company and insured agree to a specific value of a particular property before the policy is issued. If a total loss occurs, the insurer will pay the Agreed Value.
Stated Value
>A valuation method that states the value of a particular property on the declarations page, but provides for the insurer to pay the lesser of the stated value or ACV of the property following a loss.
Valued Policy
>A policy that states the value of property as the amount shown on the Declarations page and will pay that full face value in the event of a total loss, regardless of the actual cash value.
Functional Replacement Value
> The cost to replace property with other property that performs the same function with similar efficiency, although the replacement property is not identical to the property being replaced. This valuation method is typically used with older property (suc
Market
>The price a willing buyer would pay for property purchased from a willing seller.
Frame
>A building that has a roof, floor, and supports of combustible material, usually wood, and combustible interior walls.
Joisted Masonry
>Buildings with exterior walls of masonry or fire-resistive construction rated for not less than one hour and with combustible floors and roofs.
Noncombustible
>The buildings and its walls, floors, and structural framework are constructed of noncombustible materials.
Masonry Noncombustible
>Buildings with exterior walls of masonry (not less than 4 inches thick) or made of fire-resistive construction with a rating of not less than one hour and noncombustible floors and roofs.
Fire Resistive
>The entire building and roof are constructed of reinforced concrete and steel. Must have at least a 2-hour fire resistive rating.
Modified Fire Resistive
>The materials used in the walls, floors, and roof of a structure must have a fire resistive rating of at least 1 hour, but less than 2 hours.