WV Property & Casualty key terms

A financial stake in the person or property being insured, meaning the insured would suffer a real economic loss if a loss occurred. In property insurance it must exist at the time of the loss.

The principle that a property claim payment should restore the insured to roughly the same financial position held before the loss, no better and no worse, so the insured cannot profit from a loss.

The expectation that applicant and insurer both deal honestly and disclose all material facts. Insurers depend on accurate information from applicants to decide whether and how to insure a risk.

An agreement in which the amounts exchanged by the parties are unequal and depend on chance. The insured pays a set premium while the insurer may pay a large loss or nothing at all.

A condition of dishonesty or questionable character that increases the chance or size of a loss, such as deliberately causing a fire to collect insurance. Insurers screen for it during underwriting.

The insurer's right, after paying a claim, to pursue the responsible third party to recover what it paid. It helps hold premiums down and prevents the insured from collecting twice for one loss.

The tendency of people with the greatest likelihood of loss to seek or keep insurance more eagerly than low-risk people. Insurers manage it through underwriting, pricing, and policy design.

The value of damaged property at the time of loss, usually figured as replacement cost minus depreciation. It is the default valuation method in many property policies when no other method is stated.

The amount needed to repair or rebuild damaged property with new materials of similar kind and quality, without subtracting depreciation. Many policies cap this payment at a stated percentage or dollar amount.

A property provision requiring the insured to carry insurance equal to a stated percentage of the property's value to receive full payment for a partial loss. Carrying too little insurance reduces the claim payment.

A policy form that covers only the causes of loss specifically listed in the policy. The insured must show that the damage resulted from one of those listed perils.

Also called special form coverage, it insures against all risks of direct physical loss except those expressly excluded. The insurer carries the burden of proving that an exclusion applies.

A formal, usually sworn statement the insured submits describing the loss, its date and cause, and the amount claimed. Policies set a deadline for filing it after a loss.

A policy provision naming a lender as loss payee on insured property. The lender receives claim payments up to its interest and stays protected even if the borrower's own acts void the policy.

The homeowners section that insures the main residential structure at the described location, including attached structures such as a built-in garage, against covered causes of loss.

Homeowners coverage for household contents and personal belongings, both at and away from the residence, subject to special dollar limits and often a lower valuation method for certain items.

Homeowners coverage that pays additional living expenses when a covered loss makes the residence unfit to live in, or pays fair rental value when the home is rented to others.

Homeowners coverage that pays sums the insured becomes legally obligated to pay because of bodily injury or property damage caused by an occurrence, plus defense costs, up to the stated limit.

Homeowners coverage that pays reasonable medical expenses for third parties injured at the insured location or by the insured's activities, regardless of fault, up to a modest stated limit.

Dollar caps in the homeowners policy that restrict recovery for certain categories of personal property, such as money, jewelry, silverware, and firearms, even though the overall contents limit is higher.

The most widely used homeowners form. It covers the dwelling and other structures on an open peril basis while covering personal property for named perils only.

A packaged policy for eligible small and medium businesses that combines commercial property and general liability coverage with built-in extensions, typically costing less than separate policies.

The commercial property form insuring a business's buildings, business personal property, and personal property of others at covered locations, with separate limits and coinsurance percentages for each category.

The commercial property forms that define which perils are covered: basic, broad, and special. They attach to a coverage form and can be narrowed or broadened by endorsement.

Commercial coverage that replaces lost net income and continuing expenses during a covered shutdown, and pays extra costs incurred to speed the resumption of operations after a covered loss.

The time frame used to measure a business income loss. It begins when the physical damage occurs and ends when the property could reasonably be repaired or replaced with like kind and quality.

Commercial property coverage in which one limit applies to two or more buildings, items of personal property, or locations, so the total limit can be shared among them.

The standard personal lines auto form covering a named insured's private passenger autos for liability, medical payments, uninsured motorist, and physical damage coverages under one contract.

Auto liability limits written as three numbers, such as 25/50/25, meaning the per-person bodily injury maximum, the per-accident bodily injury maximum, and the per-accident property damage maximum.

A liability limit stated as one total amount available for all bodily injury and property damage arising from a single accident, rather than separate per-person and per-accident caps.

Auto physical damage coverage that pays for damage to the covered auto caused by hitting another object or by overturning, regardless of fault, after the deductible is applied.

Auto physical damage coverage for losses such as fire, theft, vandalism, hail, and animal strikes, once called comprehensive. A deductible usually applies and it is often paired with collision.

Auto coverage that pays the insured's damages for bodily injury caused by an at-fault driver who carries no insurance or by a hit-and-run driver, up to the policy limits.

The standard commercial liability policy covering bodily injury, property damage, personal and advertising injury, and medical payments arising from the insured's premises, operations, and products.

An accident, including continuous or repeated exposure to substantially the same general harmful conditions, that results in bodily injury or property damage during the policy period.

A liability policy that covers claims first reported during the policy period no matter when the injury happened, usually subject to a retroactive date and optional extended reporting periods.

General liability coverage for bodily injury and property damage that occurs away from the insured's premises and arises from products sold or completed work, subject to its own aggregate limit.

A liability policy that sits above underlying auto, general liability, or employers liability coverage, paying excess limits and sometimes filling gaps for exposures the underlying policies exclude.

Failure to use the degree of care a reasonable person would use in similar circumstances. A liability claim requires duty, breach of that duty, causation, and actual damages.

Coverage that pays statutory benefits to employees injured on the job regardless of fault, and provides employers liability protection for work-related injury claims that fall outside the workers compensation statute.