NE Property & Casualty key terms

A license issued by a state insurance department that authorizes an insurer to transact insurance business in that state. Selling insurance without one is illegal.

An insurance company that has received a certificate of authority from the state and must therefore comply with its insurance laws, including rate filing rules and guaranty fund participation.

A non-admitted insurer that may write coverage in a state only for risks that admitted insurers decline or cannot handle, usually placed through a specially licensed surplus lines broker.

A person licensed by the state to sell, solicit, or negotiate insurance for an insurer or an insured. Nebraska requires prelicensing education, a passing exam, and continuing education.

The obligation of a producer or insurer to hold premiums and other money belonging to others in trust, account for it accurately, and avoid commingling it with personal or business funds.

Offering part of a producer's commission, or anything of value not stated in the policy, to persuade a buyer to purchase insurance. It is an illegal inducement in Nebraska and most states.

A state entity funded by insurers that pays covered claims of policyholders when an admitted insurer becomes insolvent. It does not cover surplus lines insurers or most large commercial risks.

A financial stake in the person or property insured such that the insured would suffer a genuine economic loss from damage or death. It must exist when property coverage begins.

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

The high standard of honesty required of both insurer and applicant, demanding full and accurate disclosure of material facts on applications and fair dealing in claims handling.

A statement or condition in a policy that the insured promises is true. A material breach may allow the insurer to deny a claim or treat coverage as void.

The voluntary giving up of a known right under a policy, such as the right to demand prompt notice. Once waived, that right generally cannot be reclaimed later.

A legal doctrine that stops a party from asserting a right after its earlier conduct led someone else to rely on that conduct and suffer harm as a result.

A cause of loss, such as fire, windstorm, theft, or collision. A policy lists which perils it covers and which ones it excludes.

A condition that increases the chance or severity of loss from a given peril, such as oily rags (physical), dishonesty (moral), or carelessness about loss (morale).

The uncertainty about whether a loss will happen. Insurance addresses pure risk, where only loss or no loss is possible, rather than speculative risk that carries a chance of gain.

The insurer's right, after paying a claim, to step into the insured's shoes and recover from the responsible third party, which helps control premiums and prevents double recovery.

A property provision requiring the insured to carry limits equal to a stated percentage of the property's value; if the limit falls short, the claim is reduced proportionally at the time of loss.

The cost to replace damaged property with new property of like kind and quality, minus depreciation. It is the default valuation method in many property policies.

The amount needed to repair or rebuild damaged property with new materials of similar kind and quality, with no deduction for depreciation, usually subject to the policy limit.

A policy provision naming a lender as an additional payee, giving it loss proceeds up to its interest and the right to advance notice if the policy is cancelled or not renewed.

Property insurance that applies one limit across two or more items or locations, instead of assigning a separate specific limit to each building or contents item.

A provision explaining how a loss is shared when two or more policies cover the same property or exposure, often using pro rata, contribution, or excess formulas.

Coverage for the added cost of rebuilding to current building codes, or for demolishing undamaged remains, after a covered loss; often limited or excluded unless endorsed.

A statute requiring an insurer to pay the full face amount of a policy when a building suffers a total loss, without reducing the payment for actual cash value.

Failure to use the degree of care a reasonable person would exercise, causing unintended injury or damage. A claim requires duty, breach, causation, and actual damages.

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

Liability coverage that responds to claims first made against the insured during the policy period, no matter when the injury happened, often subject to a retroactive date.

One dollar limit that applies to all bodily injury and property damage arising from a single accident, rather than separate per-person and per-accident limits.

Money awarded to make an injured party whole, covering items such as medical bills, lost wages, pain and suffering, and the cost of repairing damaged property.

Damages intended to punish a defendant for especially reckless or intentional conduct and to deter similar behavior. Many liability policies do not cover them.

Liability coverage for offenses such as libel, slander, false arrest, invasion of privacy, and infringement of copyright in an advertisement, rather than for bodily injury.

Coverage that pays reasonable medical expenses for others injured on the insured's premises or by the insured's operations, regardless of fault, up to a stated limit.

A homeowners form covering the dwelling and other structures on an open-peril basis while personal property is covered for named perils; it is the most widely sold homeowners form.

A standardized personal lines form covering liability, medical payments, uninsured motorists, and physical damage for private passenger autos, with exclusions for business use.

A liability form for businesses covering bodily injury, property damage, personal and advertising injury, and medical payments arising from premises, operations, and products.

A packaged commercial form combining property and general liability coverage for eligible small and medium businesses, frequently including business income coverage automatically.

Coverage providing statutory benefits, including medical care, disability income, and death benefits, to employees injured on the job regardless of fault; it is usually the exclusive remedy.

A policy supplying excess limits above underlying auto, general liability, or homeowners coverage, and sometimes filling gaps; it normally requires underlying insurance to be maintained.

An inland marine form covering movable business property such as tools, cameras, or construction equipment wherever it travels, including off premises and while in transit.

A property form for residential buildings that are not owner-occupied, such as rentals or seasonal homes, offering named-peril coverage and fewer extras than homeowners forms.