IN Property & Casualty key terms

The chance of loss or uncertainty about the outcome of an event. In insurance, it usually means the possibility that a covered event will cause financial harm.

The specific cause of a loss, such as fire, windstorm, theft, or collision. Policies identify which perils are covered and which are excluded.

A condition that increases the likelihood or severity of a loss. Physical hazards include faulty wiring, while moral and morale hazards involve dishonest or careless behavior.

A financial stake in the person or property insured such that a loss would cause genuine economic harm. It must exist when a property loss occurs.

The principle that insurance should restore an insured to approximately the same financial position held before a loss, without allowing the insured to profit from the loss.

The insurer's right to pursue a third party who caused a loss after the insurer pays the insured. It helps prevent double recovery and control claim costs.

A loss valuation method equal to replacement cost minus depreciation. It reflects the used or current value of damaged property rather than the cost to buy new property.

A loss valuation method that pays the cost to repair or replace damaged property with new property of similar kind and quality, without deducting depreciation.

A property policy condition requiring the insured to carry insurance equal to a stated percentage of the property's value; if not, a penalty reduces the claim payment.

Damaged property that the insurer may take after paying a total loss claim. The insurer can sell it to recover part of the claim cost.

Failure to exercise the degree of care a reasonable person would use under similar circumstances, resulting in unintended injury or damage. It is the basis of most liability claims.

Legal responsibility for harm caused to another person or their property. Liability insurance pays covered damages and defense costs on behalf of the insured.

A civil wrong, other than a breach of contract, that causes harm and leads to legal liability. Negligence, defamation, and trespass are common examples.

Indiana's modified comparative fault rule reduces a claimant's recovery by the claimant's share of fault and generally bars recovery when the claimant is more than 50 percent at fault.

Physical injury, sickness, disease, or death sustained by a person. Liability policies often use this term to define which harms are covered.

Physical injury to tangible property, including loss of use of that property. It can also include loss of use of property that is not physically injured.

Coverage that replaces lost net income and continuing normal expenses when a covered property loss interrupts business operations for a defined period.

A liability policy that provides limits above underlying auto, homeowners, or commercial liability policies and may fill some coverage gaps.

A statutory benefit system that pays medical costs and lost wages to employees injured on the job, regardless of fault, in exchange for liability protection for employers.

Auto coverage that pays an insured's damages caused by a driver who has no liability insurance or who cannot be identified, such as a hit-and-run driver.

Auto coverage that responds when an at-fault driver has liability insurance but its limits are too low to pay the insured's damages in full.

Auto coverage for damage to the insured vehicle caused by impact with another vehicle or object, or by overturn, regardless of fault.

Auto coverage for damage to the insured vehicle from causes other than collision, such as fire, theft, vandalism, hail, or flood. It is often called other-than-collision.

A liability policy for businesses covering third-party claims for bodily injury, property damage, personal injury, and advertising injury arising from premises, operations, or products.

Coverage for water damage from rising surface water, waves, or overflow of a body of water. Standard property policies generally exclude flood, so separate coverage is needed.

The amount of a covered loss the insured must pay before the insurer pays its share. Deductibles reduce small claims and lower premium costs.

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

A liability policy form that covers claims reported during the policy period, regardless of when the harmful act occurred, subject to any retroactive date.

The maximum amount an insurer will pay for all covered claims during a policy period, in addition to any per-occurrence limits stated in the policy.

A written amendment added to an insurance policy that changes, adds, or removes coverage, terms, or conditions. It becomes part of the policy.

A policy provision that describes losses or situations the insurer will not cover. Exclusions help define the scope of coverage.

Termination of a policy before its expiration date. State law and policy terms control who may cancel, for what reasons, and how much notice is required.

The state agency that regulates insurers, producers, and insurance transactions in Indiana, enforces insurance statutes, and issues licenses.

The chief official who leads the Indiana Department of Insurance and enforces state insurance laws, including issuing rules, orders, and licenses.

An insurer authorized by the Indiana Department of Insurance to transact insurance in the state and subject to its regulation and guaranty fund protections.

Coverage placed with an eligible nonadmitted insurer when admitted insurers will not provide the needed coverage. Special licensing and disclosure rules apply.

A license issued by the Indiana Department of Insurance authorizing a person to sell, solicit, or negotiate insurance in the state.

Offering or giving something of value to a client as an inducement to buy insurance, beyond what the policy provides. It is generally prohibited by state law.

Inducing a policyholder to lapse or surrender an existing policy through misleading or incomplete comparisons. It is generally prohibited as an unfair trade practice.

Prohibited insurer conduct such as unreasonably delaying or denying claims, failing to investigate promptly, or offering far less than the claim is worth.