VT Property & Casualty key terms

An insurance company licensed by Vermont's insurance regulator to transact business in the state, subject to state solvency oversight, rate and form filing rules, and guaranty fund protection.

A non-admitted insurer that may write Vermont risks only when admitted carriers decline them, placed through a licensed surplus lines broker; its policies are not protected by the state guaranty association.

A statutory safety net that pays covered property and casualty claims against insolvent Vermont-licensed insurers, up to statutory limits, funded by assessments on member insurers.

Vermont law requiring owners and operators of motor vehicles to carry liability insurance of at least $25,000 per person and $50,000 per accident for bodily injury, plus $10,000 for property damage.

A financial stake in the property or person insured, meaning the insured would suffer real economic loss from a covered event; property insurance requires it when the loss occurs.

The principle that an insurance payment should place the insured back in roughly the same financial position held before the loss, without profit or betterment.

The duty of both applicant and insurer to deal honestly and disclose all material facts, because the insurer relies on the applicant's information when deciding whether and at what price to insure.

After paying a covered claim, the insurer's right to step into the insured's shoes and recover the amount paid from the responsible third party, reducing premiums and preventing double recovery.

A property valuation method equal to replacement cost minus depreciation, reflecting what the damaged item was worth just before the loss occurred.

A property valuation method that pays what it costs today to repair or replace damaged property with new material of similar kind and quality, with no deduction for depreciation.

A property provision requiring the insured to carry a limit equal to a stated percentage of property value; if the limit is lower, claims are reduced by the ratio of carried insurance to the required amount.

A property form that covers risks of direct physical loss unless the loss is specifically excluded, which is broader than a form that must name each covered peril.

Failure to use the care a reasonable person would use under similar circumstances; proving it requires a duty owed, a breach of that duty, proximate cause, and actual damages.

A liability rule that compares the claimant's carelessness with the defendant's and reduces the award by the claimant's share of fault; under Vermont's modified version, a claimant more at fault than the defendant recovers nothing.

Liability assigned to one person for the negligent acts of another because of their relationship, such as an employer's responsibility for an employee acting within the scope of employment.

A liability policy covering injury or damage that takes place during the policy period, even if the claim is brought years later, providing long-tail protection for gradual exposures.

A liability policy that responds to claims first made and reported during the policy period, usually with a retroactive date that bars coverage for incidents occurring before that date.

The homeowners coverage for household contents and personal belongings, typically on a named-peril basis, with special dollar limits for items such as jewelry, cash, silverware, and firearms.

Homeowners coverage paying necessary increases in living expenses when a covered loss makes the residence uninhabitable, plus fair rental value when rented portions become unusable.

Homeowners coverage paying damages the insured is legally obligated to pay for another person's bodily injury or property damage caused by a covered occurrence, plus related defense costs.

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

A homeowners policy written for renters, insuring personal property and personal liability but not the building, and including loss-of-use coverage for temporary housing after a covered loss.

The section of the personal auto policy that pays damages for bodily injury and property damage the insured is legally responsible for in an auto accident, and covers defense costs.

Coverage paying the insured's damages for bodily injury caused by a driver with no insurance or with limits too low, including hit-and-run drivers, up to the coverage limits purchased.

Auto coverage that pays reasonable medical and funeral expenses for the insured and passengers hurt in an accident, regardless of who caused it, up to the stated limit.

Commercial property coverage that replaces lost net income and continuing normal operating expenses while a covered loss interrupts the business, typically through the period of restoration.

The core commercial property form insuring the building, the insured's business personal property, and personal property of others in the insured's care, with optional causes of loss and valuation methods.

A commercial policy insuring movable property such as tools, equipment, or goods in transit at any location, filling gaps left by property policies that only protect fixed locations.

The standard commercial liability form covering sums an insured owes for third-party bodily injury, property damage, and personal and advertising injury, along with defense costs.

CGL coverage for bodily injury or property damage arising from the insured's products or completed work after they leave the insured's control and away from the insured's premises.

A CGL offense category covering harms such as libel, slander, wrongful eviction, and misappropriation of advertising ideas, kept separate from bodily injury and property damage.

A commercial auto form using numbered covered-auto symbols to show which vehicles are insured, such as owned, hired, non-owned, or borrowed autos, with liability and physical damage options.

Coverage for liability arising from cars the business rents, hires, or borrows and from employees' own cars used for company business, filling gaps personal auto policies may leave.

A package policy for eligible small and medium businesses, combining property and general liability with common extensions in one contract, usually at lower cost than separate policies.

The rule that workers' compensation benefits are an injured employee's sole remedy against the employer for a work injury, exchanging tort lawsuits for no-fault statutory benefits.

A workers' compensation rating factor based on the employer's past losses compared with expected losses for its classification; below 1.00 credits a good loss record, above 1.00 penalizes a poor one.

A policy providing limits above the insured's underlying auto, general liability, and employers liability policies, and sometimes covering gaps the underlying policies exclude or do not address.

The amount an insured pays out of pocket for a loss before an excess, umbrella, or specialized liability policy responds; it often applies to defense costs as well as damages.

A three-party guarantee in which the surety promises the obligee that the principal will perform an obligation, paying a penalty if the principal defaults, with the principal bound to reimburse the surety.

A bond that reimburses an employer for money or property lost to dishonest or fraudulent acts by its own employees, such as theft, embezzlement, or forgery.