KY Property & Casualty key terms

An insurance company that holds a license from the Kentucky Department of Insurance to transact business in the state and is subject to its financial and market conduct regulation.

The formal license issued by the Kentucky Department of Insurance that authorizes an insurer to write specified lines of insurance within the state.

A non-admitted company that may insure Kentucky risks only when admitted insurers decline them, usually placed through a specially licensed surplus lines broker.

A person licensed by the state to sell, solicit, or negotiate insurance contracts on behalf of insurers, including agents and brokers.

A producer's legal obligation to hold premiums and returned premiums in trust and to account for those funds promptly and accurately, never mixing them with personal money.

A genuine financial stake in the person or property insured, such that a loss would cause real economic harm. It is required for a valid insurance contract.

The principle that insurance should restore the insured to approximately the same financial position as before the loss, never allowing a gain from the loss.

The mutual duty of applicant and insurer to deal honestly with each other, disclosing material facts and avoiding concealment or misrepresentation during underwriting and claims.

A false statement on an insurance application that would have changed the insurer's decision to issue the policy or the premium charged, and which may allow the insurer to rescind.

The voluntary, intentional surrender of a known right under an insurance policy; once waived, the insurer usually cannot later enforce that right against the insured.

A legal doctrine barring a party from asserting a right or fact when its earlier conduct led another party to rely on that conduct and suffer harm.

The insurer's right, after paying a covered loss, to step into the insured's shoes and recover those payments from the party that caused the damage.

Prohibited insurer conduct such as misrepresenting policy terms, failing to investigate a claim promptly, or offering substantially less than a reasonable settlement amount.

Giving an applicant anything of value not stated in the policy, such as cash or gifts, as an inducement to buy insurance; it is illegal in Kentucky.

The state agency that licenses insurers and producers, examines insurer finances, reviews rates and policy forms, and enforces Kentucky insurance law.

The cost to repair or replace damaged property with new property of like kind and quality, minus depreciation; the default valuation method in many property policies.

The amount needed to repair or rebuild damaged property using new materials of comparable quality, with no deduction for depreciation, usually limited by the policy amount.

A property provision requiring the insured to carry limits equal to a stated percentage of property value; otherwise claim payments are reduced in proportion to the shortfall.

The portion of each covered loss the insured absorbs before the insurer begins to pay; it may be a flat dollar amount or a percentage of the limit.

A property form covering only the causes of loss specifically listed in the policy, so the insured must show the damage came from a listed peril.

A property form insuring all risks of direct physical loss except those expressly excluded, which puts the burden on the insurer to prove an exclusion applies.

A condition in which a building has no occupants and little or no personal property inside; most property policies restrict or suspend coverage after a stated number of days.

Pays the net income a business would have earned plus continuing normal operating expenses during the period reasonably needed to restore operations after a covered loss.

Pays the extra cost of demolishing, rebuilding, or upgrading damaged property to satisfy current building codes or zoning rules that apply after a covered loss.

Homeowners coverage that pays additional living expenses when a covered loss makes the residence uninhabitable, and lost fair rental value if the home was rented out.

Failure to use the degree of care a reasonable person would exercise in similar circumstances, resulting in unintended injury or damage to another party.

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

A liability policy that responds to claims first reported during the policy period, regardless of when the injury happened, subject to any stated retroactive date.

Kentucky's rule that reduces an injured claimant's recovery by their own share of fault but still allows recovery even when the claimant was mostly at fault.

A person or organization given liability protection under another party's policy by endorsement, commonly for liability arising from the named insured's work or premises.

General liability coverage for bodily injury or property damage occurring away from the insured's premises and arising from products sold or work completed by the insured.

Liability coverage for offenses such as libel, slander, invasion of privacy, and wrongful eviction, which cause harm without bodily injury or property damage.

The maximum a commercial general liability policy pays for all covered claims in a policy period other than those counted against the products-completed operations aggregate.

Auto liability limits written as three separate numbers for bodily injury per person, bodily injury per accident, and property damage per accident.

One liability limit that applies to the total of all bodily injury and property damage from a single accident, rather than separate per-person and per-accident amounts.

Pays the insured for damages caused by a driver who carries no liability insurance, or by a hit-and-run driver, up to the coverage limits purchased.

Kentucky's no-fault first-party coverage paying medical expenses, lost wages, and replacement services for the insured and passengers after an auto accident, regardless of who caused it.

A residual mechanism that provides basic no-fault benefits to people injured in Kentucky motor vehicle accidents who cannot collect from any policy of motor vehicle insurance.

A law requiring vehicle owners to prove they can pay for damages caused in an accident, typically by maintaining liability insurance, or face license and registration penalties.