NH Property & Casualty key terms

The uncertainty about whether a loss will occur and how severe it might be. Insurers measure risk to decide whether to offer coverage, what to charge, and what exclusions to apply.

The actual cause of a loss, such as fire, windstorm, theft, or collision. Policies state which perils they cover and which they exclude, so coverage depends on the cause of damage.

A condition that increases the likelihood or size of a loss. Physical hazards include icy steps, moral hazards involve dishonest intent, and morale hazards involve carelessness or indifference.

A financial stake in the person or property being insured such that the insured would suffer real economic loss if a covered event occurred. Property insurance requires it at the time of loss.

The principle that insurance should restore an insured to about the same financial position as before a loss, no better and no worse. It supports policy limits, deductibles, and actual cash value settlements.

The mutual duty of the insured and insurer to act honestly and disclose material facts. Concealment, misrepresentation, or fraud can give the insurer grounds to deny a claim or rescind coverage.

The insurer's right to pursue a third party who caused a loss after the insurer has paid the insured. It helps hold responsible parties accountable and allows the insurer to recover claim costs.

A temporary written or oral agreement that provides immediate insurance coverage until the formal policy is issued. It is subject to the terms of the eventual policy and may be cancelled according to its terms.

A settlement method that pays the cost to replace damaged property minus depreciation. It reflects the property's value at the time of loss rather than the cost of buying new property.

A settlement method that pays to repair or replace damaged property with new property of similar kind and quality, without deducting depreciation, up to the policy limit.

A property policy provision requiring the insured to carry coverage equal to a stated percentage of the property's value. If the limit is too low, claim payments are reduced proportionally.

The amount of a covered loss the insured must pay before the insurer begins paying. A higher deductible usually lowers the premium because the insured retains more of each loss.

A formal statement, often sworn, that the insured submits to the insurer describing a claim's date, cause, and amount of damage. It helps the insurer verify the claim before payment.

A dispute-resolution process used when the insurer and insured disagree on the amount of a property loss. Each side selects an appraiser, and the appraisers may choose an umpire.

A property condition in which a building has no occupants and no personal property inside, which increases loss potential. Many property policies restrict or exclude coverage after a specified vacancy period.

Failure to use the degree of care a reasonably prudent person would use in similar circumstances, resulting in harm to another. It is the basis for most liability claims.

An unbroken chain of events between an act or condition and resulting injury or damage, without which the loss would not have happened. It links conduct to harm in liability claims.

Coverage that pays amounts an insured becomes legally obligated to pay because of bodily injury or property damage caused to others, plus defense costs, subject to policy terms and limits.

A liability policy that covers injury or damage that happens during the policy period, regardless of when the claim is reported. Coverage follows the date of the event.

A liability policy that covers claims first made against the insured during the policy period, often with a retroactive date limiting coverage for earlier acts. Reporting timing is critical.

The maximum amount an insurer will pay for all covered claims during a policy period, in addition to any per-occurrence limit. Once the aggregate is exhausted, no further claims are paid.

A package policy for individuals and families that insures a dwelling, personal property, and personal liability. It combines property coverage with liability and medical payments in one contract.

A property policy designed for residential structures that may not qualify for a homeowners policy, such as rental dwellings or homes under construction. It covers the building and sometimes personal property but generally excludes liability.

A policy provision that protects a lender's interest in insured property by allowing the lender to receive loss payments and notice of cancellation, even if the insured's own claim is denied.

Coverage that replaces lost net income and pays continuing normal operating expenses, such as rent or payroll, when a covered peril interrupts business operations during a period of restoration.

A standard commercial policy covering a business's liability for bodily injury, property damage, personal and advertising injury, and products-completed operations, with occurrence or claims-made options.

Commercial general liability coverage for offenses such as libel, slander, false arrest, invasion of privacy, and infringement of copyright or slogan in an advertisement. It is separate from bodily injury and property damage.

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

A policy that provides liability limits above those of underlying policies and may fill gaps in coverage. It usually applies after the primary policy's limits are exhausted.

Statutory coverage that pays medical benefits and wage replacement to employees injured on the job, regardless of fault. Employers must carry it as required by state law.

Coverage that responds to employee injury claims not covered by workers' compensation, such as certain third-party or intentional tort claims, and is usually written with workers' compensation.

A standard policy covering personal use of autos, including liability, medical payments, uninsured motorist, collision, and other-than-collision coverage. It applies to the insured, family members, and permissive users.

Coverage that pays an insured's damages when a negligent driver has no insurance or has limits too low to cover the loss. It may also cover hit-and-run accidents.

Coverage for claims that a professional's error, omission, or negligent advice caused financial harm or injury to a client. It is often written on a claims-made basis.

The state agency that regulates the insurance industry in New Hampshire, licenses producers, reviews insurer solvency and market conduct, and handles consumer complaints and inquiries.

The official who heads the New Hampshire Insurance Department, with authority to enforce insurance laws, issue licenses, adopt rules, and take action against violators.

A credential issued by the New Hampshire Insurance Department that authorizes a person to sell, solicit, or negotiate insurance in the state. Licensees must meet education and conduct requirements.

An insurer's written authorization for a licensed producer to act on its behalf in selling its products. The insurer must notify the state within required timeframes.

Offering a client part of the producer's commission or anything of value not stated in the policy as an inducement to buy insurance. It is prohibited as an unfair trade practice in New Hampshire.

New Hampshire rules requiring drivers to be able to pay for damages they cause. The state does not require liability insurance for all drivers, but common minimum limits are $25,000/$50,000/$25,000.