ND Property & Casualty key terms

A license issued by a state insurance department that authorizes an insurer to transact specified lines of insurance business in that state; transacting insurance without one is illegal.

A state-issued credential allowing an individual or business to solicit, negotiate, or sell insurance; it requires prelicensing education, a passed licensing exam, and continuing education to remain active.

Coverage placed by a licensed surplus lines broker with an insurer not authorized in the state, used when admitted insurers will not accept the risk; special eligibility, disclosure, and tax rules apply.

Statutorily prohibited claim-handling conduct, such as misrepresenting policy provisions, failing to investigate promptly, or offering far less than is owed, which can result in penalties against the insurer.

The legal obligation of a producer to hold premiums and other client money in trust, account for it accurately, and remit it to the insurer or refund it as owed.

A financial stake in the person or property insured such that the insured would suffer a genuine economic loss from its damage or destruction; for property coverage it must exist when the policy begins.

The principle that insurance restores the insured to roughly the same financial position held before a loss, no better and no worse, so that insurance cannot produce a profit.

An agreement in which the values exchanged by the parties are unequal and depend on chance; the insured pays a certain premium and may receive a much larger payment or no payment at all.

A policy drafted by the insurer and offered to the applicant on a take-it-or-leave-it basis, so ambiguous wording is generally interpreted in favor of the insured who had no part in writing it.

The insurer's right, after paying a claim, to step into the insured's shoes and pursue the party that caused the loss, which helps control premiums and prevents double recovery.

An unbroken chain of events set in motion by a covered peril that produces the loss without an intervening excluded cause; it determines whether damage is covered.

The value of damaged property at the time of loss, usually calculated as replacement cost minus depreciation; it is the default valuation method in many property forms.

The amount needed to repair or replace damaged property with new property of comparable kind and quality, without deducting for depreciation, often subject to policy limits and conditions.

A property provision requiring the insured to carry insurance equal to a stated percentage of the property's value; if that amount is not carried, the claim payment is reduced proportionally.

A coverage approach in which every cause of loss is covered except those specifically excluded, in contrast to named-peril forms that list only the causes they insure.

Failure to use the degree of care a reasonable person would use in similar circumstances; a liability claim usually requires duty, breach of duty, causation, and resulting damages.

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

A liability policy that responds to claims first made or reported during the policy period, regardless of when the injury occurred, usually limited by a retroactive date.

Separate dollar limits for bodily injury per person, bodily injury per accident, and property damage per accident, such as 25/50/25, common in auto and liability policies.

Legal responsibility imposed on one party for the negligent acts of another, such as an employer's liability for an employee acting within the scope of employment.

Property forms written on dwellings (DP-1 basic, DP-2 broad, and DP-3 special), typically for owner-occupied or rented homes that do not qualify for a homeowners policy.

Dwelling coverage that reimburses the reasonable rental value of the damaged premises while it is unfit to live in, for the time reasonably needed to repair or replace it.

Coverage for structures on the residence premises separated from the dwelling by clear space, such as detached garages, fences, and sheds, usually at a percentage of the dwelling limit.

The most widely used homeowners form, which insures the dwelling and other structures on an open-peril basis while personal property is covered for named perils only.

The homeowners section insuring the insured's personal belongings both on and off the residence premises, usually at a percentage of the dwelling limit and subject to special sub-limits.

Homeowners liability coverage that pays sums the insured becomes legally obligated to pay as damages because of bodily injury or property damage caused by an occurrence.

An endorsement listing specific valuable items such as jewelry, furs, or cameras, providing higher limits and broader perils, and typically no deductible, for those listed items.

Auto coverage that pays medical expenses, lost wages, and similar economic losses for the insured and passengers regardless of who caused the accident; required in no-fault states.

Auto coverage that responds when an insured is injured by a driver who carries no liability insurance, or by a hit-and-run driver, up to the stated limits.

Physical damage coverage for damage to the insured auto caused by impact with another vehicle or object, or by overturn, and usually subject to a deductible.

Physical damage coverage for losses to the insured auto that are not collisions, such as fire, theft, vandalism, hail, flood, or striking an animal.

Commercial property coverage that replaces lost net income during a shutdown caused by a covered loss, plus extra costs incurred to keep operating or resume business sooner.

A single property limit that applies to two or more locations, items, or buildings, allowing the limit to be shared among them rather than assigned separately to each.

Commercial general liability coverage for bodily injury or property damage arising from the insured's product or completed work away from the premises, usually subject to its own aggregate limit.

Commercial general liability Coverage B, covering offenses such as libel, slander, wrongful eviction, and infringement of advertising ideas, rather than bodily injury or property damage.

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

The principle that workers compensation benefits are an injured employee's only recovery from the employer for a work injury, barring most negligence lawsuits in exchange for no-fault benefits.

Part Two of a workers compensation policy, covering the employer's liability for work-related injury claims that fall outside statutory benefits, such as certain third-party actions.

A rating factor based on an employer's loss history compared with other employers in the same class; a credit below 1.00 lowers premium and a debit above 1.00 raises it.

North Dakota's state-operated workers compensation system, which is the exclusive source of workers compensation coverage for employers in the state; private insurers do not write those benefits.