GA Property & Casualty key terms

An insurer that holds a license from the Georgia Commissioner of Insurance to write business in the state. Admitted insurers are subject to rate and form filing rules and are backed by the state guaranty fund.

Coverage placed with a nonadmitted insurer by a specially licensed surplus lines broker when no admitted insurer will write the risk. The broker must document a diligent search and disclose that guaranty fund protection does not apply.

Offering a prospect anything of value, such as part of the agent's commission, gifts, or paid expenses, that is not stated in the policy, as an inducement to buy insurance. It is an illegal unfair trade practice in Georgia.

An agent's obligation to hold premiums in a trust capacity, keep them separate from personal funds, and account for them promptly to the insurer or insured. Commingling is prohibited and can lead to license action.

A state mechanism that pays certain unpaid claims of insurers that have been declared insolvent after being licensed to do business in Georgia. It does not cover claims against nonadmitted insurers.

A financial stake in the person or property insured such that a loss would cause the insured a genuine economic loss. Property insurance requires it at the time of loss; life insurance only at policy issue.

The principle that insurance should restore the insured to approximately the same financial position held before the loss, no better and no worse. It is the reason policies use actual cash value and deductibles.

The mutual duty of applicant and insurer to deal honestly and disclose all material facts. Breach through misrepresentation, concealment, or warranty violation can allow the insurer to rescind or deny coverage.

Waiver is the voluntary giving up of a known policy right; estoppel prevents the insurer from later asserting that right when the insured reasonably relied on the insurer's conduct to their detriment.

A condition that increases the likelihood or severity of a loss, such as icy steps, faulty wiring, or poor housekeeping. Hazards differ from perils, which are the actual causes of loss such as fire or windstorm.

The standard property valuation of replacement cost minus depreciation, reflecting what the damaged property was worth at the time of loss. Some policies instead define it as fair market value.

A valuation that pays what it costs to repair or replace damaged property with new property of similar kind and quality, without deducting for depreciation, usually once repairs or replacement are completed.

A property provision requiring the insured to carry insurance equal to a stated percentage of the property's value, often 80 percent. If the insured carries less, the loss payment is reduced proportionally.

A policy provision protecting a lender's interest in insured property. The lender receives loss payments up to its interest, notice of cancellation, and protection even when the insured's own acts would otherwise void coverage.

Failure to use the degree of care a reasonable person would use in similar circumstances. A liability claim requires a duty owed, a breach of that duty, proximate cause, and actual damages.

Money awarded to a claimant for actual harm, including special damages such as medical bills and lost wages and general damages such as pain and suffering. They are distinct from punitive damages.

A liability policy that covers claims first reported during the policy period, regardless of when the injury occurred, subject to a retroactive date. It contrasts with an occurrence policy.

A person or organization added to another party's liability policy and given protection for claims arising out of the named insured's operations or premises, often because a contract requires it.

A property policy for residential structures that are not owner-occupied, such as rental dwellings, and for owner-occupied homes that do not qualify for a homeowners policy. It excludes liability coverage.

Dwelling coverage that reimburses the insured for rental income lost when a rented dwelling unit is made uninhabitable by a covered loss, for the reasonable time needed to repair or replace it.

The DP-1 basic, DP-2 broad, and DP-3 special forms differ mainly in perils insured against; DP-1 and DP-2 are named-peril forms, while DP-3 covers risks of direct physical loss unless excluded.

The most common homeowners form, covering the dwelling and other structures on an open-peril basis, meaning risks of direct physical loss unless excluded, while personal property is covered for named perils only.

Dollar caps in Coverage C that restrict payment for certain categories of personal property, such as money, jewelry, silverware, firearms, and business property, even when the overall coverage limit is higher.

Homeowners Coverage D, which pays additional living expenses when a covered loss makes the residence unfit to live in, plus fair rental value for rented space, for a reasonable time.

Homeowners coverage that pays sums the insured becomes legally obligated to pay because of bodily injury or property damage to others caused by a covered occurrence, and also pays defense costs.

A state law requiring drivers to prove the ability to pay damages caused by an auto accident, typically through liability insurance, and imposing penalties such as license suspension for failure to comply.

Auto coverage that pays medical expenses, lost income, and similar out-of-pocket costs for the insured and passengers without regard to fault, up to a stated limit and subject to state requirements.

Coverage that pays the insured's damages from an accident caused by a driver with no insurance, a hit-and-run driver, or an underinsured driver, within the limits shown on the policy.

Auto liability limits stated as three numbers, such as 25/50/25, representing the maximum paid per person for bodily injury, per accident for bodily injury, and per accident for property damage.

A commercial policy covering bodily injury and property damage caused by an occurrence during the policy period, plus personal and advertising injury, medical payments, and defense costs, subject to stated limits.

Commercial property coverage that replaces lost net income and continuing expenses during the period of restoration after a covered loss, and pays added costs incurred to resume operations quickly.

A single property limit that applies to two or more locations, buildings, or categories of property, rather than a separate specific limit being assigned to each item insured.

Coverage on a structure under construction, including materials, supplies, and equipment intended to become part of the building, written for the construction period and often on a completed value basis.

The workers compensation principle that statutory benefits are an employee's only recovery from the employer for a work-related injury, generally barring a negligence lawsuit over the same injury.

A number applied to workers compensation premium that reflects an employer's past claims experience relative to others in the same classification; a factor above 1.00 increases the premium.

Statutory benefits including medical care, temporary and permanent disability income, death benefits for dependents, and rehabilitation services, provided without regard to who was at fault for the injury.

A package policy for small and medium businesses combining property and general liability. Eligibility is limited to specified classes, such as apartments, offices, retail, and service risks, with size and occupancy restrictions.

Excess liability coverage that sits above underlying auto, general liability, and employers liability policies, paying after those limits are exhausted and sometimes filling gaps in the underlying coverage.

Coverage that reimburses an employer for money or property lost through dishonest or fraudulent acts, such as employee theft, a loss that standard commercial property forms commonly exclude.

Coverage for property that is mobile or in transit, such as tools, equipment, or goods being shipped, and for certain property classes that standard property forms handle poorly or exclude.