MO Property & Casualty key terms

A financial stake in the person or property insured such that the insured would suffer a genuine economic loss if a loss occurred; in property insurance it must exist at the time of loss.

The idea that insurance should restore the insured to roughly the same financial position held before a loss, no better and no worse, so that no one profits from insurance.

A duty of complete honesty between insurer and applicant that requires accurate disclosure of material facts on the application and fair dealing by both parties throughout the policy term.

The insurer's right, after paying a claim, to pursue the responsible third party to recover amounts paid, which helps hold down premiums and prevents the insured from collecting twice.

A statistical principle holding that as the number of similar exposure units grows, actual loss experience becomes more predictable and approaches the expected probability, supporting accurate rates.

An insurer licensed by the Missouri Department of Insurance to transact business in the state, subject to its rate, form, and solvency regulation and backed by the state guaranty association.

A non-admitted insurer allowed to write coverage for risks that admitted carriers decline; its rates and forms are not state-filed and its policies are not protected by the guaranty association.

The power an agent or broker has to act for an insurer: express authority is written in the agency contract, implied authority is customary to the role, and apparent authority arises from the insurer's conduct toward the public.

Offering any part of a commission, premium, or other valuable consideration to a buyer as an inducement to purchase insurance; it is a prohibited unfair trade practice in Missouri.

A producer's duty to hold premiums and other funds belonging to insurers or insureds in trust and to account for them properly, with misuse leading to license suspension or criminal penalties.

A property valuation equal to replacement cost minus depreciation, reflecting what the damaged item was worth just before the loss; fair market value is sometimes used instead.

A valuation method that pays the cost to repair or replace damaged property with new property of similar kind and quality, with no deduction for depreciation, usually subject to policy limits.

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.

The amount of a covered loss the insured must absorb before the insurer pays; it reduces small claims, lowers premium, and is subtracted from each covered loss payment.

Failure to use the degree of care a reasonable person would exercise under similar circumstances; a claimant must prove duty, breach of duty, causation, and damages.

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

The most an insurer will pay for all covered claims combined during a single policy period, sitting above and separate from any per-occurrence limit in the policy.

The maximum amount an insurer will pay for damages arising out of any one occurrence or accident, regardless of how many claimants or injured persons are involved.

A person or organization added to another party's liability policy by endorsement, receiving coverage for liability arising out of the named insured's operations, premises, or work.

A liability policy that responds to claims first made against the insured during the policy period, no matter when the injury occurred, usually limited by a retroactive date.

Commercial general liability coverage for bodily injury or property damage occurring away from the insured's premises and arising out of the insured's products or completed work.

Liability coverage for offenses such as libel, slander, invasion of privacy, wrongful eviction, and infringement of advertising ideas, as distinct from bodily injury or property damage.

The homeowners coverage that insures household contents and personal belongings both on and off the residence premises for covered perils, up to the stated limit.

Homeowners Coverage D, which pays additional living expenses when the residence is uninhabitable because of a covered loss, or fair rental value if the home had been rented out.

The most widely used homeowners policy, insuring the dwelling and other structures on an open-peril basis while covering personal property only for listed named perils.

A property-only form for residential risks that provides no personal liability or medical payments coverage, often used for rental dwellings or homes with unusual occupancy or ownership.

Commercial property coverage for the insured's movable business assets at the described premises, such as furniture, stock, fixtures, and machinery, plus limited property away from the premises.

Commercial coverage that replaces lost net income and continuing normal operating expenses while a business is shut down by a covered property loss, until operations resume.

A common property exclusion barring payment for the extra cost of complying with building codes or ordinances after a loss, such as demolition or upgraded construction; limited coverage can be added by endorsement.

The standard personal automobile form that provides liability, medical payments, uninsured motorist, and physical damage coverage for a household's private passenger vehicles.

Auto coverage that pays the insured for bodily injury caused by a driver who carries no liability insurance, or by a hit-and-run driver, up to the stated limit.

Auto coverage that pays reasonable medical and funeral expenses for the insured and passengers injured in an auto accident, regardless of who caused the accident.

A state law requiring drivers to prove they can pay for damages caused by an accident, typically satisfied by carrying liability insurance or posting a bond or cash deposit.

The principle that workers' compensation benefits are an injured employee's sole remedy against the employer, generally barring lawsuits and shielding the employer from unlimited liability.

A workers' compensation premium multiplier that compares an employer's past loss experience with that of similar employers; a factor below 1.00 produces a premium credit.

A liability policy that pays above the limits of underlying primary policies and can fill some coverage gaps, applying a self-insured retention to exposures not covered below.

Property coverage for goods in transit, property of others in the insured's care, and portable or floating property, following the maritime tradition of insuring property that moves.

A person or business that temporarily holds property belonging to others, such as a dry cleaner or repair shop, and may insure that exposure with bailee or inland marine coverage.

Crime coverage that insures loss of money, securities, or other property caused by employees who steal or embezzle, often written with limits per employee or per occurrence.

A packaged policy for small and mid-sized businesses that combines commercial property and general liability coverage with optional endorsements under simplified eligibility and rating rules.