WI Property & Casualty key terms

Wisconsin's state insurance regulator, headed by the Commissioner of Insurance. It licenses insurers and producers, reviews policy forms and rates, examines insurer finances, and enforces state insurance statutes and claim-practice rules.

A license from the Wisconsin Commissioner of Insurance permitting an insurer to do business in the state. Insurers lacking one are nonadmitted and generally cannot lawfully sell to Wisconsin consumers.

A statutory guaranty fund that pays covered claims of policyholders and claimants of insolvent, admitted Wisconsin insurers, within statutory limits, when the insurer cannot meet its obligations.

A financial stake in the person or property insured such that a loss would cause the insured genuine economic harm. For property insurance, it must exist at the time of loss.

The rule that insurance should restore the insured to approximately the same financial position held before a loss, no better and no worse, so the insured cannot profit from a claim.

The elevated standard of honesty required of applicants and insurers alike, demanding accurate statements on applications and disclosure of material facts that would affect the underwriting decision.

After paying a covered claim, the insurer's right to step into the insured's shoes and pursue the responsible third party for the amount paid, preventing double recovery by the insured.

A statistical principle that as the number of similar, independent exposure units grows, actual loss experience becomes more predictable and approaches the expected result, enabling insurers to price risk.

A property provision requiring insurance equal to a stated percentage of the property's value. If the insured carries less at loss time, the claim is reduced by the ratio of carried to required insurance.

The indemnity valuation equal to the cost to replace damaged property minus depreciation, reflecting the property's used value immediately before the loss.

The amount needed to repair or replace damaged property with new property of comparable kind and quality, with no deduction for depreciation, often subject to policy limits or conditions.

The most widely used homeowners form. It covers the dwelling and other structures for risks of direct physical loss unless excluded, while personal property is covered for named perils; liability coverage is included.

The renters policy. It insures a tenant's personal property, loss of use, and personal liability, but not the building itself, which the landlord is expected to insure.

The homeowners liability insuring agreement that pays damages the insured is legally obligated to pay for bodily injury or property damage to others caused by an occurrence, plus defense costs.

Endorsement paying the extra cost to repair or rebuild in compliance with current building codes, plus the value of the undamaged portion of a building that must be demolished after a covered loss.

Commercial property coverage replacing lost net income and continuing expenses during the period needed to restore operations after a covered loss, plus extra costs to keep the business running.

Coverage for structures while under construction, including materials, supplies, and equipment that will become part of the building, usually written for the completed value of the project.

Coverage for loss from accidental failure of mechanical, electrical, or pressure equipment, such as a boiler explosion or motor burnout, a peril property forms exclude, including resulting business income loss.

Insurance for property that moves or is specialized, including goods in transit, property of others in the insured's care, and mobile equipment, tracing its origins to ocean marine coverage.

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

A fault-sharing rule that reduces an injured person's recovery in proportion to their own negligence and bars recovery entirely once their share of fault reaches the statutory threshold.

Liability assigned to one party for the negligent acts of another because of a relationship between them, such as employer and employee or parent and child, regardless of the first party's own conduct.

An accident, including continuous or repeated exposure to substantially the same harmful conditions, that causes bodily injury or property damage during the policy period; the trigger for most liability coverage.

The commercial general liability insuring agreement that pays damages the insured is legally obligated to pay because of bodily injury or property damage covered by the policy, plus related defense costs.

Liability coverage for specified offenses such as libel, slander, wrongful eviction, and infringement of advertising ideas, separate from Coverage A bodily injury and property damage.

Injury or damage arising from the insured's products or completed work away from the premises, usually subject to its own aggregate limit and its own premium basis.

A person or organization added to another party's liability policy by endorsement, gaining coverage for liability arising out of the named insured's operations, such as a project owner added to a contractor's policy.

A standard CGL exclusion removing coverage for property damage to the insured's own work and for the cost of repairing or replacing it, while damage to other property may still be covered.

The standard personal insurance contract covering liability, medical payments, uninsured motorists, and physical damage for designated autos and, in limited cases, non-owned autos.

Separate dollar caps for bodily injury per person, bodily injury per accident, and property damage per accident, commonly written as three numbers such as 25/50/25.

Coverage paying the insured's bodily injury damages when the at-fault driver carries no liability insurance or cannot be identified, as in a hit-and-run, up to the selected limit.

Coverage responding when the at-fault driver has liability insurance but not enough to pay the insured's damages, paying the shortfall up to the limit the insured purchased.

Numbered designations on a business auto coverage form showing which categories of autos are insured, such as owned, hired, or non-owned autos, so vehicles need not be individually listed.

A no-fault statutory system requiring employers to pay medical expenses, wage replacement, rehabilitation, and death benefits to employees injured on the job, regardless of who caused the injury.

The doctrine that statutory workers' compensation benefits are an injured employee's only recovery from the employer for a work injury, shielding the employer from most tort suits.

A multiplier applied to workers' compensation premium, calculated by comparing an employer's past losses with expected losses for similar businesses; values above 1.00 raise premium and values below reduce it.

Liability coverage sitting above underlying policies, paying after those limits are exhausted and, subject to a self-insured retention, covering some exposures the underlying policies exclude.

The amount the insured must pay from its own funds for a loss before excess, umbrella, or certain specialty coverage responds, functioning like a deductible for otherwise uncovered exposures.

Crime coverage reimbursing an employer for money, securities, or other property stolen by employees through theft, forgery, or fraudulent means, usually written with a per-loss limit.

Coverage for claims that a professional failed to exercise reasonable skill, causing financial loss or bodily harm through negligent acts, errors, or omissions in rendering services.