WV Property & Casualty flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Insurable Interest

A financial stake in property or a person such that a loss would cause monetary harm. In property insurance it must exist at the time of loss.

Principle of Indemnity

Insurance restores the insured to approximately the same financial position held before the loss, no better and no worse, so the insured cannot profit from a claim.

Aleatory Contract

A contract in which the values exchanged are unequal and depend on chance; a small premium may produce a large claim payment or no payment at all.

Contract of Adhesion

The insurer drafts the policy and the insured accepts or rejects it. Because of this unequal bargaining position, ambiguous wording is construed against the insurer.

Moral Hazard

A hazard arising from the insured's dishonest tendencies, such as intentionally causing a loss or exaggerating a claim in order to collect insurance money.

Law of Large Numbers

The principle that as the number of similar exposure units increases, actual losses become more predictable, allowing insurers to set stable and accurate rates.

Actual Cash Value

Replacement cost minus depreciation, or fair market value, reflecting what the damaged property was worth immediately before the loss occurred.

Coinsurance Clause

Requires the insured to carry insurance at least equal to a stated percentage of property value; otherwise a loss is paid in the ratio of insurance carried to insurance required.

Proof of Loss

A sworn statement by the insured detailing the amount, date, and cause of loss, submitted within the period required by the policy as a condition of payment.

Mortgagee Clause

Protects a lender's interest in insured property by allowing the lender to receive loss payments, submit proof of loss, and pay premiums if the insured fails to.

Vacancy

A property condition where a building has no occupants and no contents, which typically suspends or restricts coverage for vandalism, glass breakage, and water damage.

HO-3 Special Form

A homeowners policy providing open-peril coverage on the dwelling and other structures, while personal property is covered only for the listed named perils.

Coverage B Other Structures

Protects structures on the residence premises that are not attached to the dwelling, such as detached garages and fences, usually limited to 10 percent of Coverage A.

Coverage D Loss of Use

Pays additional living expenses and fair rental value when a covered loss makes the residence uninhabitable, limited to a percentage of Coverage A and a time period.

Coverage F Medical Payments

Pays reasonable medical expenses for persons other than insureds injured on the residence premises or by an insured's activities, regardless of fault and up to a per-person limit.

HO-4 Tenants Form

Covers a renter's personal property and personal liability without insuring the building itself; the tenant's personal property is covered for named perils.

Dwelling Policy

Covers dwellings, their contents, and loss of use without any liability coverage; used for rental dwellings, secondary homes, and properties ineligible for homeowners coverage.

Business Income Coverage

Pays the net income the business would have earned plus continuing normal operating expenses, including payroll, during the period of restoration after a covered loss.

Businessowners Policy

A package policy for eligible small and medium businesses that combines business property and general liability coverage with simplified rating and built-in coverage extensions.

Agreed Value Option

An optional commercial property provision in which the insured and insurer agree on a property value in advance; when selected, the coinsurance requirement does not apply.

Causes of Loss Special Form

An open-peril commercial property form covering all risks of direct physical loss except those specifically excluded, such as flood, earthquake, and employee dishonesty.

Period of Restoration

The time reasonably needed to repair or replace damaged property with similar quality and speed, ending when the property could have been rebuilt or the business relocated.

Personal Auto Part A

Liability coverage paying damages the insured becomes legally obligated to pay because of bodily injury or property damage arising out of an auto accident.

Split Liability Limits

Limits shown as three numbers, such as 25/50/25, representing the maximum per person for bodily injury, per accident for bodily injury, and per accident for property damage.

Combined Single Limit

One total dollar amount that applies to all bodily injury and property damage arising from any one accident, without separate per-person or per-category caps.

Uninsured Motorist Coverage

Pays bodily injury damages the insured is legally entitled to recover from an at-fault driver who has no insurance, and may also cover hit-and-run and underinsured drivers.

Newly Acquired Auto

A vehicle acquired during the policy period that receives automatic coverage, typically for 14 days, when the policy includes collision or other than collision coverage.

Commercial General Liability

Covers bodily injury, property damage, and personal and advertising injury arising from the insured's premises, operations, products, or completed work under an occurrence or claims-made trigger.

Occurrence Trigger

A coverage trigger that responds when the bodily injury or property damage happens during the policy period, regardless of when the claim is later reported to the insurer.

Claims-Made Trigger

A coverage trigger that responds when a claim is first made and reported during the policy period, with coverage limited to wrongful acts occurring after the retroactive date.

Umbrella Policy

Provides excess limits over underlying policies and can drop down to cover gaps in coverage, usually subject to a self-insured retention paid by the insured.

Negligence Elements

The four elements a claimant must prove: a legal duty owed, a breach of that duty, proximate cause linking the breach to the injury, and actual damages.