AZ Property & Casualty key terms

A license issued by the Arizona Department of Insurance that lets an insurer legally sell insurance in the state. Operating without one is unauthorized and generally outside guaranty fund protection.

Coverage placed with an insurer not licensed in Arizona when admitted insurers decline the risk. Only specially licensed surplus lines brokers may place it, and the state guaranty fund does not back it.

A credential from the Arizona Department of Insurance that authorizes a person to solicit, negotiate, or sell insurance. It states the lines of authority and carries continuing education and compliance duties.

A producer's legal obligation to hold client premiums and funds in trust and to act honestly in the client's interest. Mixing premium money with personal or business funds is prohibited.

Prohibited conduct such as misrepresentation, false advertising, twisting, rebating, and unfair claim settlement. Arizona regulators may investigate these acts and impose fines or license penalties.

A state pool funded by admitted insurers that pays certain claims when an admitted insurer becomes insolvent. It generally does not cover surplus lines or self-insured arrangements.

A financial stake in the person or property insured such that a loss would cause the insured a real economic loss. It must exist when the policy starts and, for property, when a loss occurs.

The principle that insurance should restore the insured to about the same financial position as before a loss, not create a profit. It shapes policy limits, valuation methods, and deductibles.

The mutual duty of the insurer and applicant to deal honestly and disclose material facts. Concealment or material misrepresentation can let the insurer rescind the policy or deny a claim.

A false statement of fact that would have affected an insurer's decision to issue coverage or set its terms. It can give the insurer grounds to void the policy or deny a claim.

Waiver is voluntarily giving up a known right. Estoppel stops a party from later asserting that right when another party reasonably relied on the waiver and would be harmed.

An insurer's right to pursue a responsible third party after paying the insured's claim. It helps prevent double recovery by the insured and can reduce claim costs and premiums.

The event or chain of events that directly produces a loss without a break. If an excluded peril is the proximate cause, coverage generally fails even when other factors contributed.

The value of damaged property measured as replacement cost minus depreciation. It reflects the property's age and condition at the time of loss rather than the price of new property.

The amount needed to repair or replace damaged property with new property of similar kind and quality, without subtracting depreciation. Policies may require actual repair and may cap the payout.

A property policy condition requiring the insured to carry coverage equal to a stated percentage of the property's value. If the limit is too low, claim payments are reduced proportionally.

The most an insurer will pay for all covered claims during a policy period combined. Once this total is used up, no more coverage applies until the policy renews.

The maximum an insurer will pay for any one covered loss event. Several claimants injured in a single accident usually share this one limit unless the policy says otherwise.

A policy form that covers only the causes of loss specifically listed, such as fire, windstorm, or vandalism. The insured generally must show that the loss resulted from a listed peril.

A policy form that covers all risks of direct physical loss except those specifically excluded. The insurer bears the burden of showing that an exclusion applies to the loss.

Coverage that pays extra living costs and lost rental income when a covered loss makes the home uninhabitable. Payments usually continue for a stated time after the loss.

Coverage for the added cost of rebuilding to current building codes after a covered loss, such as upgraded wiring or accessibility features. Standard forms provide little or no such coverage without an endorsement.

Coverage for lost net income and continuing fixed costs during a shutdown from a covered loss, plus extra costs to resume operations quickly. It helps businesses survive a temporary closure.

A policy provision protecting a lender's interest in insured property. The lender receives notice of cancellation and may claim payment even when the borrower's actions would otherwise bar recovery.

A building condition where no people and no business personal property are present. Many property policies reduce or suspend coverage after a building stays vacant beyond a stated period.

Failure to use the care a reasonable person would use in similar circumstances, causing unintended harm. A liability claim usually requires duty, breach, causation, and damages.

A person's or organization's responsibility under law to pay for harm caused to others. It may arise from negligence, contract, or statute and is the foundation of casualty insurance.

Money awarded to make an injured person whole. It includes economic losses like medical bills and lost wages plus non-economic losses such as pain and suffering.

Awards meant to punish serious or intentional wrongdoing and discourage similar conduct, not to reimburse the victim. Many liability policies exclude or limit coverage for them.

Liability coverage for offenses such as libel, slander, invasion of privacy, and infringement of copyright or slogan in an advertisement. It is distinct from bodily injury and property damage.

Coverage that pays reasonable medical expenses for others injured on the insured's premises or by the insured's operations, regardless of fault. It aims to settle small injury claims promptly.

A liability policy that responds to claims first made or reported during the policy period, regardless of when the injury happened, often subject to a retroactive date. It differs from occurrence forms.

A person or organization added by endorsement to another's policy, gaining liability coverage for claims arising from the named insured's acts or premises. The added party is protected only as the endorsement states.

A standard form insuring private passenger autos for liability, medical payments, uninsured motorist, and physical damage. It defines covered autos, covered drivers, and important exclusions.

Auto physical damage coverage for damage to the insured vehicle from impact with another vehicle or object, or from overturning. A deductible usually applies to each loss.

Coverage that pays the insured's injuries when the at-fault driver has no insurance or limits too low to cover the loss. Arizona requires insurers to offer it.

A package policy for small and mid-sized businesses that combines property, general liability, and business income coverage. Eligibility rules often limit business type and building value.

A liability form covering bodily injury, property damage, personal and advertising injury, and medical payments arising from the insured's premises, operations, or products. It is the core liability coverage for most businesses.

A policy provision barring coverage for injury, damage, or cleanup costs arising from the actual or threatened discharge of pollutants. Limited exceptions may apply, such as a hostile fire.

A loss situation where two or more perils act together, one covered and one excluded. Policy wording and court decisions determine whether any coverage applies to the resulting damage.