UT Property & Casualty key terms

A financial stake in the person or property being insured such that the insured would suffer a real economic loss if a loss occurred. In property insurance it must exist when the loss happens.

The idea that insurance should restore an insured to roughly the same financial position as before a loss, no better and no worse, rather than allowing a profit from the loss.

The heightened duty of honesty and disclosure both parties owe in an insurance contract, including revealing material facts the other side relies on when deciding to insure.

A contract drafted by one party, the insurer, and offered to the other on a take-it-or-leave-it basis, so ambiguities are generally resolved in favor of the insured.

An agreement where the amounts exchanged by the parties are unequal and depend on chance, so a small premium can produce a very large claim payment.

The voluntary surrender of a known right under a policy, such as an insurer's right to demand prompt notice. It may be implied by conduct but must be intentional.

A legal bar that stops a party from reasserting a right it gave up, or from denying conduct the other party reasonably relied on to their own detriment.

The insurer's right, after paying a claim, to stand in the insured's shoes and pursue recovery from the party that caused the loss, which prevents double recovery.

The tendency of people with the highest chance of loss to buy or keep coverage, which can push rates up and threaten insurer solvency unless underwriting screens them out.

The actual cause of a loss, such as fire, windstorm, theft, or collision. Policies state which perils they insure against.

A condition that increases the likelihood or the size of a loss from a given peril, such as a faulty wood stove in an older frame house.

The dominant, uninterrupted cause that sets a loss in motion and without which the loss would not have happened, used to decide whether coverage applies.

A settlement measure equal to replacement cost minus depreciation, so the insured receives what the damaged item was worth just before the loss occurred.

A settlement measure that pays what it costs today to buy or rebuild property of like kind and quality, with no deduction for depreciation, subject to policy limits.

A property provision requiring the insured to carry limits of at least a stated percentage of the property's value; if not, claims are reduced in proportion to the shortfall.

The person or entity shown on the declarations page as the insured, holding full rights and duties under the policy, including the right to receive notices.

A person or organization added by endorsement who receives coverage for specified exposures but generally holds fewer rights than the first named insured.

Homeowners coverage that pays the extra cost of temporary housing and meals while the dwelling is being repaired, above the insured's normal living costs.

Coverage in which every cause of loss is insured except those specifically excluded, the opposite of named peril coverage that lists the covered causes.

When a building holds neither occupants nor contents or personal property, a condition that typically limits or suspends certain property coverages under the policy.

Failure to use the care a reasonable person would use in similar circumstances. It is the basis of most liability claims and 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.

Liability coverage that responds to claims first made during the policy period, regardless of when the injury happened, often limited by a retroactive date.

Liability coverage for non-bodily offenses such as libel, slander, false arrest, invasion of privacy, and wrongful eviction, as distinct from bodily injury.

Pays reasonable medical and funeral expenses for injured persons regardless of fault, up to a stated limit, usually to avoid small liability lawsuits.

Pays an insured's bodily injury damages caused by a driver who carries no insurance or who cannot be identified, such as a hit-and-run driver.

A rule that reduces an injured party's recovery in proportion to their own share of fault and bars recovery entirely once that fault reaches a set threshold.

A statutory system paying medical and wage-replacement benefits to employees injured on the job regardless of fault, in exchange for the employer's immunity from most lawsuits.

The license the Utah Insurance Department issues to an insurer permitting it to transact insurance business in the state.

Insurance placed with a nonadmitted insurer when admitted carriers will not accept the risk, written only through a specially licensed surplus lines broker after a diligent search.

Domestic means incorporated in Utah; foreign means incorporated in another state; alien means incorporated outside the United States. The categories affect licensing and deposit rules.

A statutory entity that pays covered claims of insolvent member property and casualty insurers, funded by assessments on insurers and subject to per-claim limits.

Prohibited claim-handling conduct such as misrepresenting policy terms, unreasonable delay, failing to investigate, or offering far less than a claim is worth.

A producer's obligation to hold money belonging to clients or insurers in trust, account for it properly, and act in the interest of the party whose funds are held.

Mixing client or insurer funds with the producer's own money in the same account, a prohibited practice even if the trust funds are later restored.

Offering an applicant part of the producer's commission, or any valuable consideration not stated in the policy, as an inducement to buy. Utah prohibits the practice.

Inducing a policyholder to lapse, surrender, or replace coverage through misleading or incomplete comparisons, a prohibited unfair trade practice.

Approved coursework a licensed producer must complete to renew a license; Utah sets a biennial credit requirement that includes specified ethics hours.