DE Property & Casualty key terms

A document issued by a state insurance department that grants an insurer legal permission to transact insurance business in that state; without it the insurer is unauthorized and subject to penalties.

An insurer whose home state, meaning the state where it was chartered or incorporated, is the same state in which it is doing business; a Delaware-chartered insurer is domestic in Delaware.

Coverage placed by a specially licensed broker with a non-admitted insurer when the risk cannot be written by admitted carriers; such policies are not backed by the state guaranty fund.

State-issued authorization allowing an individual to solicit, negotiate, or sell insurance; the producer must be licensed for each line sold and must complete continuing education requirements.

The legal obligation of an insurance producer to hold premiums and client money in trust, account for it accurately, and never commingle those funds with personal or business funds.

An unfair trade practice in which a producer misrepresents coverage or uses misleading comparisons to persuade a policyholder to lapse or surrender existing insurance and buy a different policy.

Offering any part of a commission, premium, or other valuable consideration to a buyer as an inducement to purchase insurance; prohibited in Delaware as an unfair trade practice.

A financial stake in the preservation of a person or property such that loss or damage would cause a genuine economic loss; it must exist for property coverage to be valid.

The principle that insurance restores the insured to roughly the financial position held before a loss, no better and no worse, rather than allowing a profit from a claim.

The mutual duty of the insurer and the applicant to deal honestly and disclose all material facts; concealment or material misrepresentation can void the policy.

An agreement in which the amounts exchanged are unequal and uncertain, because the insurer pays only if a specified loss occurs while the insured pays premiums regardless.

The insurer's right, after paying a claim, to pursue the responsible third party for reimbursement and to share in any recovery the insured obtains from that party.

The dominant, uninterrupted cause that sets a chain of events in motion and produces a loss without which the loss would not have happened; used to determine coverage.

A condition that increases the likelihood or severity of a loss from a given peril, such as icy steps raising the chance that someone will slip and fall.

A property provision requiring the insured to carry at least a stated percentage of the property's value; when the insured is underinsured at the time of loss, the claim is reduced proportionally.

The standard property valuation of replacement cost minus depreciation, reflecting what the damaged item was worth in the marketplace just before the loss occurred.

A valuation method that pays to repair or replace damaged property with new property of similar kind and quality, with no deduction for depreciation, subject to policy limits.

A property form covering risks of direct physical loss unless a cause of loss is specifically excluded, which shifts to the insurer the burden of proving an exclusion applies.

Homeowners coverage that pays additional living expenses and fair rental value when a covered loss makes the residence uninhabitable, subject to time and dollar limits.

A property condition in which the structure is empty of both occupants and furnishings; it typically restricts or suspends coverage under property policies until the building is occupied again.

Failure to exercise the degree of care an ordinary, reasonable person would use under similar circumstances, resulting in unintended injury to others or damage to their property.

A liability policy that covers injury or damage taking place during the policy period, regardless of when the claim is later filed or reported to the insurer.

A liability policy that responds only to claims first made and reported during the policy period, usually with a retroactive date that limits how far back coverage reaches.

Money awarded to an injured party to make that person whole, covering items such as medical bills, lost wages, and pain and suffering, but not punitive amounts.

Coverage that pays reasonable and necessary medical expenses for injured persons regardless of fault, up to the stated limit, without any finding of legal liability.

The special form homeowners policy that covers the dwelling and other structures on an open peril basis while personal property is insured for listed named perils only.

The tenants form homeowners policy; it insures a renter's personal property and personal liability but provides no building coverage because the landlord insures the structure.

The personal property coverage of a homeowners policy, insuring household contents and belongings at the residence and, at reduced limits, while away from it.

Homeowners coverage that pays the extra cost to rebuild to current building code standards after a covered loss, along with related demolition and increased debris removal costs.

No-fault auto coverage that pays medical expenses, lost wages, and essential services for the insured and passengers after an accident, no matter who caused it.

Auto coverage that pays the insured's damages when an at-fault driver carries no liability insurance, or when injury is caused by a hit-and-run driver.

A state law requiring drivers to prove they can pay for damages caused by an accident, usually by carrying minimum liability limits or posting other acceptable security.

A packaged policy for small, eligible businesses that combines property and general liability coverage using standardized forms, limits, and optional endorsements.

Coverage that replaces a business's lost net income and continuing normal operating expenses during the period reasonably needed to restore operations after a covered property loss.

The most a liability policy will pay for all covered claims combined during a single policy period, as distinct from the per-occurrence limit applying to any one loss.

Liability coverage for bodily injury or property damage that occurs away from the insured's premises and arises out of the insured's products or completed work.

A state-mandated system that pays medical costs, lost wages, and death benefits to employees injured on the job, regardless of fault, in exchange for limits on employer liability.

The doctrine holding that workers compensation benefits are an employee's only recovery from the employer for a work-related injury, barring most negligence lawsuits against that employer.

Coverage that responds when an injured employee sues the employer outside the workers compensation system, such as in a third-party action or a claim alleging serious employer misconduct.

A rating factor calculated by comparing an employer's past claims with expected losses for its classification; a value below 1.00 lowers workers compensation premium.