CT Property & Casualty key terms

An insurance company that has been licensed by a state's insurance department to transact business in that state and is subject to its financial and market conduct regulation.

An insurer not licensed in the state that may write coverage for risks admitted insurers decline, usually through a specially licensed surplus lines broker; policyholders receive limited guaranty fund protection.

The license issued by a state insurance department that authorizes an insurer to conduct insurance business in that state.

A person licensed by the state to sell, solicit, or negotiate insurance on behalf of an insurer and, in many cases, to bind coverage on the insurer's behalf.

The legal obligation of an agent or broker to act in the client's best interest and to handle premium and client funds in a trustworthy manner.

The principle that an insurance payment should restore the insured to roughly the same financial position as before the loss, no better and no worse.

A financial stake in the person or property insured such that the insured would suffer a genuine economic loss if a covered event occurred.

A contract in which the amounts exchanged by the parties are unequal and depend on chance, as when a small premium buys a very large claim payment.

The principle that insurer and applicant must deal honestly and disclose all material facts, because the insurer relies on the applicant's information to underwrite the risk.

The statistical principle that the more similar exposure units an insurer covers, the more predictable its aggregate losses become, which supports accurate rate-making.

A property policy provision requiring the insured to carry insurance equal to a stated percentage of the property's value; a penalty applies to partial losses if the limit is too low.

A loss valuation method equal to replacement cost minus depreciation, reflecting the used or depreciated value of the damaged property at the time of loss.

A loss valuation method that pays what it would cost to repair or replace damaged property with new property of like kind and quality, without deducting for depreciation.

The amount of a covered loss the insured must pay out of pocket before the insurer begins to pay; choosing a higher deductible usually lowers the premium.

Failure to exercise the degree of care a reasonable person would use in similar circumstances, which is the basis for most liability claims.

An accident, including continuous or repeated exposure to substantially the same general harmful conditions, that results in injury or damage during the policy period.

Physical injury, sickness, disease, or death sustained by a person, as defined in most liability policies; it does not include emotional distress standing alone.

Auto liability limits stated as three numbers, such as 100/300/50, giving maximum amounts per person for bodily injury, per accident for bodily injury, and per accident for property damage.

A simplified property form for dwellings and their contents written without the liability coverages of a homeowners policy, often used for rental or owner-occupied homes that do not qualify for homeowners.

A package policy for owner-occupied dwellings that combines property coverage on the dwelling and contents with personal liability and medical payments coverage.

Homeowners coverage that pays additional living expenses, such as temporary housing and meals, when a covered loss makes the residence uninhabitable.

Homeowners coverage that pays sums the insured becomes legally obligated to pay because of bodily injury or property damage caused by an occurrence, plus defense costs.

Coverage that pays reasonable medical expenses for guests injured on the insured premises, regardless of fault, without requiring a lawsuit.

The standard personal lines automobile form providing liability, medical payments, uninsured motorist, and physical damage coverage for a personal vehicle.

Coverage that pays for the insured's injuries caused by a driver who has no liability insurance or, in some states, by a hit-and-run driver.

Physical damage coverage that pays for damage to the insured auto caused by impact with another object or by overturning, regardless of fault.

Physical damage coverage for losses to the insured auto from causes such as fire, theft, vandalism, glass breakage, hail, or striking an animal, excluding collisions.

A state auto system in which each driver's own insurer pays medical and related expenses after an accident, and the right to sue for pain and suffering is restricted.

The standard commercial liability form covering bodily injury and property damage liability from premises, operations, products, and completed work, plus personal and advertising injury.

Liability coverage for offenses such as libel, slander, wrongful eviction, and infringement of advertising ideas, which are distinct from bodily injury and property damage.

Commercial property coverage that replaces lost net income and continuing normal expenses, such as rent and payroll, while a business is shut down by a covered loss.

A policy that combines two or more commercial coverage lines, such as property and general liability, into one contract, often with a single aggregate limit.

A packaged policy for small and medium businesses that combines property coverage, business income, and general liability, typically with eligibility and size restrictions.

Statutory coverage that pays medical expenses and lost wages to employees injured on the job, regardless of fault, in exchange for the employer's immunity from most injury lawsuits.

Coverage that responds to employee injury claims falling outside workers' compensation benefits, for example suits by spouses or third-party actions against the employer.

The doctrine that workers' compensation benefits are the employee's sole recovery from the employer for a work-related injury, barring most tort suits.

A policy providing liability limits above the underlying auto, homeowners, or commercial policies, and sometimes dropping down to cover gaps in that underlying coverage.

Coverage for property in transit, property of others in the insured's care, and portable or floating property such as tools, instruments, and cameras.

Coverage for damage caused by the accidental breakdown of boilers, pressure vessels, machinery, or electrical equipment, including loss of business income from the resulting shutdown.

A three-party guarantee that one party will perform an obligation or pay a penalty if it does not; the surety is liable to the obligee if the principal defaults.