Rhode Island Property and Casualty Insurance Producer key terms

A financial stake in the subject of insurance such that the insured benefits from its safety or suffers loss from its damage; it must exist at the time of loss for property insurance.

The principle that an insured should be restored financially to approximately the same position as before a loss, without gaining a profit from insurance.

A principle requiring both insurer and applicant to deal honestly and disclose material facts when forming and performing an insurance contract.

The right of an insurer after paying a loss to pursue recovery from a third party responsible for the loss and to stand in the insured's legal position.

The cost to repair or replace damaged property minus depreciation, often used as the settlement basis for property claims under a policy.

The cost to repair or replace damaged property with new property of similar kind and quality, without deducting depreciation, subject to the policy limit.

A property insurance requirement that the insured carry coverage equal to a specified percentage of the property's value to avoid a reduced claim payment.

The amount of a covered loss the insured must pay before the insurer pays the remaining covered amount, which can be a flat dollar amount or percentage.

Failure to use the degree of care a reasonable person would use under similar circumstances, resulting in unintended injury or damage.

An insurer's obligation to provide legal defense for an insured against covered claims, often broader than the duty to pay damages.

Money awarded to a claimant to make up for actual losses such as medical bills, lost wages, and pain and suffering.

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

A package policy for owner-occupied dwellings that combines property coverage on the home and personal property with personal liability and medical payments coverage.

Homeowners coverage for the insured's household contents and personal belongings, usually on a named-perils basis unless endorsed, subject to special limits.

Coverage for direct physical loss from rising water, mudflow, or related flood conditions, typically provided through the National Flood Insurance Program or a private flood insurer.

A geographic area shown on a federal flood map as having a one percent or greater annual chance of flooding, where flood insurance may be required for a mortgage.

A policy covering private passenger autos that combines liability, medical payments or personal injury protection, uninsured motorist, and physical damage coverages.

Auto coverage that pays damages for which an insured becomes legally responsible because of bodily injury or property damage caused by an auto accident.

Auto coverage that responds when an insured is injured by a driver who has no liability insurance or by a hit-and-run driver, subject to policy terms.

Auto physical damage coverage that pays for damage to the insured auto from striking or being struck by another object or vehicle, regardless of fault, less any deductible.

A policy that combines two or more commercial coverage lines, such as property and general liability, into one contract with shared declarations and conditions.

Commercial property coverage that replaces lost net income and continuing normal operating expenses during the period needed to repair or replace damaged property.

A commercial property form that identifies which perils are covered, such as basic, broad, or special, and defines applicable exclusions and limitations.

Property coverage for buildings under construction, renovation, or installation, including materials, supplies, and equipment intended to become part of the completed structure.

A liability policy covering a business for bodily injury, property damage, and personal and advertising injury arising from premises, operations, products, and completed work.

A commercial general liability coverage part that responds to liability arising from products sold or work completed by the insured after the product or work has left the insured's control.

Coverage that pays statutory benefits for employees injured or made ill by work, including medical care, lost wages, and disability benefits, as required by state law.

The principle that workers compensation benefits are generally an employee's only remedy against the employer for a work-related injury, barring most tort suits.

A state-issued authorization that allows a person or business entity to solicit, negotiate, sell, or service insurance products for the lines specified on the license.

An insurer's authorization that allows a licensed producer to represent that insurer in selling or servicing its insurance products, often filed with the state insurance regulator.

A separate bank account in which an insurance producer holds premium or other customer funds in trust and does not commingle with personal or business operating funds.

Required periodic coursework or approved training that a licensed producer must complete to maintain an active license and stay current on insurance rules and practices.

The Rhode Island agency that houses the Insurance Division, which regulates insurers, producers, and insurance markets under state law.

The process of evaluating an insurance application and classifying the risk to decide whether to accept it, on what terms, and at what premium.

Risk management activities intended to reduce the frequency or severity of losses, such as safety programs, inspections, and recommendations for protective devices.

A written notice in which an insurer agrees to defend a claim while preserving its right to later deny coverage for reasons stated, avoiding waiver of those defenses.

Liability coverage for professionals, including insurance producers, for claims alleging negligent acts, errors, or omissions in the performance of professional services.