MS Property & Casualty key terms

A financial stake in the person or property being insured, so 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 principle that an insured should be restored to roughly the same financial position held before a loss, no better and no worse. It is why recovery is capped at the amount of the actual loss.

The mutual duty of insurer and applicant to deal honestly and to disclose all material facts. A material misrepresentation by the applicant can allow the insurer to void the policy.

A policy prepared by the insurer and offered to the insured on a take-it-or-leave-it basis. Because the insured has no bargaining power, ambiguities are generally construed against the insurer.

The tendency for people who face the greatest likelihood of loss to seek insurance most eagerly. Insurers control it through underwriting, exclusions, and pricing that reflects the exposure.

The insurer's right, after paying a claim, to step into the insured's shoes and pursue recovery from the party that caused the loss. It supports the indemnity principle and helps hold premiums down.

Insurance purchased by an insurer to transfer part of its risk to another insurer, called the reinsurer. It protects the ceding company's surplus and expands its capacity to write business.

A situation that offers only the chance of loss or no loss, with no possibility of gain. Insurers generally insure pure risk rather than speculative risk.

Keeping a risk and paying any resulting losses out of pocket instead of transferring the risk to an insurer. Deductibles and formal self-insurance programs are common examples.

A property provision requiring the insured to carry insurance equal to a stated percentage of the property's value. Carrying less reduces the claim payment in proportion to the shortfall.

The cost to replace damaged property with new property of like kind and quality, minus depreciation. It reflects what the property was worth at the time of the loss.

The cost to repair or replace damaged property with new materials of comparable kind and quality, without any deduction for depreciation, subject to the policy limit.

The amount of a covered loss the insured must absorb before the insurer begins to pay. Deductibles eliminate small claims and reduce the premium the insured pays.

Pays the income a business would have earned during a period of restoration after a covered loss, plus continuing normal operating expenses, so the business can resume normal operations.

Coverage for the extra cost of rebuilding to current building codes, and for the lost value of an undamaged portion when a damaged structure must be demolished. Often excluded or sublimited.

A policy provision protecting a lender's interest in insured property, giving the lender notice of cancellation and payment of its share of any loss.

Failure to exercise the degree of care a reasonable person would use in similar circumstances, resulting in unintended injury or damage. It requires duty, breach, causation, and damages.

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

A liability policy that responds to claims first made against the insured during the policy period, regardless of when the injury or damage actually happened, if reported as the policy requires.

A rule that reduces an injured party's recovery by that party's share of fault. Mississippi follows pure comparative negligence, so a claimant may recover even when mostly at fault.

A liability policy that sits above underlying auto, general liability, or homeowners coverage, adding higher limits and sometimes broader coverage once the underlying limits are exhausted.

Statutory coverage that pays medical and wage-replacement benefits to employees injured on the job, without regard to fault. Benefits are usually the employee's exclusive remedy against the employer.

Physical injury, sickness, or disease sustained by a person, including death resulting from any of these. The term is defined in liability policies and drives when coverage is triggered.

Liability coverage for offenses such as libel, slander, invasion of privacy, and infringement of advertising ideas, found in general liability forms and kept distinct from bodily injury.

A liability exclusion for damage to property in the insured's care or possession, pushing that exposure toward property insurance or bailee coverage instead.

Mississippi's elected statewide official who heads the Department of Insurance and enforces state insurance law, including licensing insurers, producers, and adjusters and reviewing market conduct.

The license the Mississippi Department of Insurance issues to an insurer authorizing it to transact insurance business in the state. Operating without one is unlawful.

Coverage placed with a nonadmitted insurer when admitted carriers will not accept the risk, after a diligent effort has been made to place it in the admitted market.

A residual market pool, often called the wind pool, that provides wind and hail coverage to coastal Mississippi property owners who cannot obtain it in the voluntary market.

A statutory entity that pays covered claims of policyholders of insolvent member property and casualty insurers, up to stated limits, for Mississippi policyholders.

The credential the state issues to an individual or business authorized to sell, solicit, or negotiate insurance. Mississippi requires prelicensing education, an examination, and continuing education.

A producer's obligation to hold premiums collected on an insurer's behalf in trust, account for them properly, and avoid commingling them with personal or business funds.

An unfair trade practice of inducing a policyholder to lapse, surrender, or replace a policy through misleading or incomplete comparisons with another policy.

Offering an inducement, such as cash or a gift, that is not stated in the policy in order to persuade someone to buy insurance. It is an unfair trade practice in Mississippi.

The policy section that identifies the insured, the property or activity covered, the limits, the deductible, the policy term, and the premium charged.

The section stating the core promise of coverage: which perils or liability exposures the insurer agrees to cover and the limits that apply to those promises.

Policy provisions that eliminate or reduce coverage for specified perils, property, persons, or situations, often because the exposure is handled by another policy or is considered uninsurable.

Provisions setting out each party's obligations, such as giving prompt notice, cooperating in the investigation, and submitting proof of loss. Failing them can jeopardize coverage.

A written amendment attached to and made part of the policy that adds, removes, or changes coverage. It takes precedence over conflicting language in the original form.

The voluntary giving up of a known right under the policy, such as a policy condition. When the insured relies on that conduct, the waiver may be enforced through estoppel.

A doctrine that prevents a party from asserting a right after its own conduct led another party to rely on that conduct to the other party's detriment.

The intentional withholding of a material fact from the insurer during application or claims handling. If the fact is material, it may allow the insurer to void the policy.

A dispute-resolution provision used when the insurer and insured disagree only on the amount of a property loss; each side selects an appraiser and an umpire resolves differences.

A sworn statement the insured submits detailing the amount and circumstances of a loss, usually within a deadline set in the policy's conditions.