LA Property & Casualty key terms

A genuine financial stake in the person or property insured, so that the insured would suffer real economic loss if a loss occurred. It must exist when a property loss happens and when a life policy is purchased.

The concept that insurance should restore an insured to roughly the financial position held before a loss, no better and no worse. It limits payment to the actual loss and drives valuation rules and policy limits.

The tendency for people most likely to suffer a loss to seek or keep coverage more eagerly than low-risk people. Insurers manage it through underwriting, exclusions, and rates that reflect expected losses.

A statistical principle stating that as an insurer covers more similar exposure units, actual losses come closer to predicted losses. This makes rates, reserves, and underwriting predictions more dependable.

Authority a third party reasonably believes an agent has because of the insurer's words or conduct, even if the insurer never actually granted it. The insurer can be bound by acts within that appearance.

Waiver is voluntarily giving up a known policy right. Estoppel stops a party from later asserting that right when the other party reasonably relied on the waiver and would be harmed.

An insurer licensed by the Louisiana Department of Insurance to do business in the state. It is subject to state solvency oversight, rate and form filing rules, and guaranty association protection.

A non-admitted insurer that may write Louisiana business only through a licensed surplus lines producer, after admitted insurers decline the risk. Its policies are not backed by the state guaranty association.

A producer's obligation to hold money belonging to insurers or insureds, such as premiums, in trust and account for it properly. Mixing those funds with personal or agency money is prohibited.

Giving or offering any part of a commission, premium, or other valuable inducement to persuade someone to buy insurance when the policy does not provide for it. Louisiana treats it as an unfair trade practice.

A statutory pool of admitted insurers that pays covered claims of insolvent member insurers, within set limits and subject to a deductible. It protects policyholders and claimants but is not a solvent-insurer substitute.

A property provision requiring the insured to carry limits equal to a stated percentage of the property's value. Carrying less triggers a penalty that reduces the claim payment proportionally.

Replacement cost of damaged property at the time of loss minus depreciation, subject to the policy limit. It reflects what the property was worth just before the loss occurred.

The amount needed to repair or replace damaged property with new property of similar kind and quality, with no deduction for depreciation. Policies usually require insuring to a percentage of full value.

The portion of each covered loss the insured absorbs before the insurer pays. It may be a flat dollar amount or a percentage of the coverage limit, and it is subtracted from the loss.

A sworn statement the insured sends the insurer, usually within a deadline after a loss, describing the damage and the amount claimed. It supports the investigation and claim decision.

The special-form homeowners policy covering the dwelling and other structures on an open-peril basis while personal property is insured for named perils. It is the standard form for owner-occupied homes.

The tenants form for renters. It insures personal property on a named-peril basis and adds liability and loss-of-use coverage, but it does not insure the rented building itself.

The condominium unit-owners form. It covers personal property and the building items the unit owner must insure under association documents, such as fixtures, cabinets, and interior alterations.

Coverage paying the extra cost of temporary housing and normal living expenses when a covered loss makes the home unusable, and also lost fair rental value, for the time and limit stated.

Protection for the extra cost of rebuilding to current building codes, or of demolishing undamaged remnants, when enforcement of local ordinances is triggered by a covered loss.

The federal program making flood insurance available in communities that adopt floodplain management rules. Its Standard Flood Insurance Policy is separate from homeowners coverage and has its own limits and rules.

A deductible stated as a percentage of a coverage limit, rather than a flat dollar amount, that applies to hurricane or named-storm losses. It is higher than the standard deductible and must be disclosed clearly.

The commercial form insuring a business's buildings, business personal property, or both, against named perils or a special causes-of-loss form, with optional coverages and coinsurance terms.

Coverage replacing a business's lost net income and continuing normal expenses during a shutdown from a covered loss, and paying extra costs to keep operating or resume operations sooner.

Crime coverage reimbursing an employer for money, securities, or other property stolen by employees through theft, forgery, or similar acts, usually written with a per-loss limit and a waiting period.

Coverage for accidental damage to boilers, pressure vessels, machinery, and electrical equipment from internal failures such as rupture, burnout, or arcing, which most property forms exclude.

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

A system that reduces an injured person's recovery in proportion to that person's own share of responsibility. A claimant who is partly at fault may still recover, but the award is reduced accordingly.

Legal responsibility placed on one party for the acts of another, such as an employer being liable for an employee's negligent acts committed within the scope of employment.

A liability policy covering injury or damage that happens during the policy period, no matter when the claim is reported later. The date of the injurious event controls coverage.

A liability policy covering claims first made against the insured during the policy period, subject to a retroactive date. Retroactive dates and extended reporting options are key features to compare.

A person or organization given insured status under another party's policy by endorsement, usually because a contract requires it, but only for liability tied to that named insured's operations.

Policies that sit above primary liability coverage. Excess coverage follows the primary policy's terms and limits; an umbrella may also drop down and fill gaps with broader coverage.

Louisiana law requiring owners and drivers to show financial responsibility, typically liability insurance with minimum limits of $15,000 per person and $30,000 per accident for bodily injury and $25,000 for property damage.

Coverage paying an insured's damages when the at-fault driver carries no liability insurance or too little to cover the loss. Louisiana requires the coverage unless the insured rejects it in writing.

The rule that workers' compensation benefits are an employee's sole recovery from the employer for a work-related injury, barring tort suits against that employer except in narrow situations.

A number, usually near 1.00, that adjusts workers' compensation premium up or down based on how an employer's past losses compare with other employers in the same classification.