MN Property & Casualty key terms

A credential issued by the Minnesota Department of Commerce that allows a person to sell, solicit, or negotiate insurance. The producer must hold a line of authority matching the business written, such as property and casualty.

The formal authorization an insurer gives a licensed producer to act as its agent. In Minnesota the appointment must be filed with the Department of Commerce before the producer writes business for that insurer.

A producer's legal obligation to handle money belonging to clients or insurers, such as collected premiums, honestly and in trust. Client funds must be kept separate from the producer's personal or business accounts.

Offering part of a producer's commission, or anything of value not stated in the policy, to persuade a buyer to purchase insurance. Minnesota treats rebating as a prohibited unfair trade practice.

Deceptive or anti-competitive conduct in insurance, such as misrepresenting policy terms, false advertising, twisting, or unfair claim settlement. The Commerce Commissioner may investigate and impose penalties.

A statutory entity that pays covered claims of policyholders of insolvent member insurers, up to set dollar limits. It is funded by assessments on insurers rather than by state tax money.

Insurance placed with a non-admitted insurer when no admitted insurer will write the risk. Minnesota requires a surplus lines license, a documented diligent search, and disclosure to the buyer.

A genuine financial stake in the person or property insured such that the insured suffers real loss if the event occurs. It must exist when the policy starts and, for property, at the time of loss.

The principle that insurance restores the insured to roughly the same financial position held before a loss, no better and no worse. It prevents profiting from loss and underlies most property and liability coverage.

A policy drafted by the insurer with little or no input from the insured. Because the insured had no bargaining power over the wording, ambiguities are generally construed against the insurer.

An agreement in which the values exchanged may be unequal and depend on chance. The insured pays a modest premium but may receive a much larger payment if a covered loss occurs.

The high standard of honesty required of both insurer and applicant. It requires full and accurate disclosure of material facts during underwriting and fair, prompt handling of claims.

Waiver is the voluntary surrender of a known policy right. Estoppel bars the insurer from later enforcing that right when its conduct led the insured to reasonably rely on the waiver.

The insurer's right, after paying a claim, to step into the insured's legal position and pursue the responsible third party for reimbursement. It helps control premiums and prevents double recovery.

Temporary written or oral evidence of insurance that provides coverage before the permanent policy is issued. It is subject to the same terms and conditions the final policy will contain.

The cost to replace damaged property minus depreciation, often described as replacement cost less physical wear and obsolescence. It is the default valuation method in many property forms.

The amount needed to repair or rebuild with new materials of like kind and quality, with no deduction for depreciation. Many homeowner forms pay it only when the insured carries adequate limits.

A property provision requiring the insured to carry at least a stated percentage of the property's value to collect fully on a partial loss. Payment is reduced by the ratio of carried limit to required limit.

The homeowner policy part that insures the residence structure itself, including attached garages and permanently installed fixtures. The dollar limit appears on the declarations page.

The homeowner policy part that insures household contents and personal belongings owned or used by the insured, generally anywhere in the world, subject to special limits for certain categories.

Coverage that pays extra living expenses, or fair rental value, when a covered loss makes the residence uninhabitable. Payments typically stop when repairs should reasonably have been completed.

A policy provision giving a lender rights to receive loss payments and notices and to pay premiums when the insured property secures a loan. It protects the lender separately from the borrower.

Coverage for water damage from rising water, which standard property policies exclude. In Minnesota it is usually purchased through FEMA's National Flood Insurance Program or a private carrier.

Failure to use the care a reasonable person would use under similar circumstances. A claimant must prove duty, breach of that duty, causation, and actual damages to recover.

Liability coverage triggered by injury or damage that takes place during the policy period, no matter when the claim is later filed. It contrasts with coverage written on a claims-made basis.

Liability coverage triggered when a claim is first made against the insured during the policy period. A retroactive date limits how far back covered acts may have occurred.

A broad liability policy covering third-party bodily injury, property damage, and personal and advertising injury arising from the insured's premises, operations, products, and completed work.

Liability coverage for non-bodily offenses such as libel, slander, wrongful eviction, invasion of privacy, and infringement of advertising ideas, subject to listed exclusions and conditions.

A policy that sits above underlying liability coverage and pays after those limits are exhausted, sometimes also filling gaps. The insured must usually maintain the specified underlying policies.

Auto coverage paying the insured or passengers for damages caused by a driver with no liability insurance, including a hit-and-run driver. Minnesota requires insurers to offer it.

Minnesota's no-fault auto coverage that pays medical expenses, lost wages, and replacement services after an accident regardless of who caused it, subject to policy and time limits.

The rule that workers' compensation benefits are an injured employee's sole legal remedy against the employer. In exchange for no-fault benefits, most negligence suits against the employer are barred.

The policy page listing the named insured, policy period, coverage limits, deductibles, and described property. It personalizes the policy and shows how each limit applies.

A written amendment that changes, adds to, or removes policy terms. It becomes part of the policy and controls over conflicting printed wording in the original form.

Policy provisions stating what the insured and insurer must do for the contract to operate, such as giving notice of loss, protecting property, cooperating, and filing suit within a time limit.

The steps an insured must take after a claim, typically prompt notice, a signed proof of loss, protecting property from further damage, and cooperating with the insurer's investigation.

A process for resolving a disagreement over the dollar amount of a loss without litigation, using an appraiser chosen by each side and an umpire when the two cannot agree.

A provision stating that if the insurer broadens coverage in a later form without extra premium during the policy term, the broader coverage applies automatically to the current policy.

A provision explaining how two or more policies covering the same loss share payment, often pro rata by limits or with one policy primary and the other excess.

A provision that limits or removes coverage, especially for vandalism, glass breakage, and water damage, when a building has been empty beyond a stated number of days.