Contracts
Who are never considered to be without legal capacity?
Minors, mentally incompetent, incapacitated, and people under the influence of drugs or alcohol.
What is making an insured the same financial or physical condition that existed prior to the loss is known as this
Principle of Indemnity
One party writes this type of contract and the other party may not negotiate
Contract of Adhesion
This occurs when there is willful withholding of material information pertinent to issuance of the contract or payment.
Concealment
Declarations Page
This usually is a page found on commercial policies that outline exclusions
Limitations
This is a person company or organization designated on the Declarations page usually the owner of property or vehicle.
Named Insured
Primary Insurance
A sworn formal statement made by the insured and delivered to the insurer within a specific time is called what?
Proof of Loss
The legal process of allowing an insurer to seek recovery for paid claims from a third party responsible for loss.
Subrogation
If the insurer and the insured disagree about the amount payable for the claim or if claim is payable at all they can go to this
Arbitration
If the insurer cancels the policy a proportionate cancellation of insurance will refund the unearned premium is known as this
Pro-Rata Cancellation
Legal Purpose and Good Faith
What is the potential for an insured to suffer financial or economic hardship in the event of a loss?
Insurable Interest
This is a contract that allows for an unequal exchange of consideration.
Aleatory Contract
This is a false statement made intentionally to deceive or induce another party to issue a contract, part with something of value or surrender a legal right.
Fraud
This part of the contract has the perils that are insured against.
Insuring Agreement
This page lists the provisions of an insurance policy typically added for an additional premium
Endorsements
This is the first person named on the Declarations page granted rights and responsibilities not given to others.
First Named Insured
This is insurance that is provided after limits of primary coverage are exhausted.
Excess Insurance
This is specified in the Declarations and tells how long the policy will be in force.
Policy Period
Prompt notice
Cooperate with investigation
Promptly notify police in case of theft
Protecting from further damage
(There are more)
Intentional concealment or misrepresentation of material information or fraudulent conduct is grounds for this.
Voiding policy
If the insurer retains a portion of the unearned premium to cover administrative costs, is known as this
Short Rate Cancellation
An agreement must have these two elements
Offer and Acceptance
This states that policies must be interpreted in a way that a reasonable and prudent policy holder would expect?
Reasonable expectations
Both parties must perform certain duties to make the contract enforceable.
Conditional Contract
The five elements of fraud are what?
Intentional false statement
Disregard for the victim
Victim believes the false statement
Victim makes a decision and or acts based on the belief or reliance on the false statement
The victims decison results in a loss.
This section specifies the obligations that the insured and insurer agree to follow.
Conditions
These are coverages that are automatically added to a policy without an additional premium.
Additional Coverage
This is a person not ordinarily protected by a policy but who through the addition of endorsement to the policy is granted status as an insured.
Additional Insured
Binder
This is the term used to specify where the policy is in force meaning the United States, its territories and possessions, Puerto Rico and Canada.
Policy Territory
The exception to the assignment clause would be this
Death
This is the termination of the policy before its expiration.
Cancellation
If the insurer must refund the entire policy premium this is known as what?
Flat Cancellation
This is the part of a contract that has an exchange of value between the parties
Consideration
This assumes that both parties act in good faith when forming and entering into an insurance contract?
Utmost Good Faith
This is a contract between the insurance company and an individual and cannot be transferred or assigned to somoene else.
Unilateral Contract
This is the voluntary surrender of a known or legal right or advantage
Waiver
This section specifies the perils that are NOT ensured against on the property that is not covered by the policy.
Exclusions
Words, terms and phrases clearly described and used on the policy.
Definitions
This is a sudden unforeseen unintended and unplanned event resulting in bodily injury or property damage.
Accident
This is a document that shows evidence of insurance that specific types of insurance were purchased for certain amounts
Certificate of Insurance
This is often done for Commercial Policies and takes in to account the reporting by the insured to insurer which helps develop these.
Premium Audit
Other Insurance
This is the amount of premium already paid by the insured and applies to actual number of days coverage was in place prior to cancellation.
Earned Premium
If the insurer chooses to not renew a policy this is called what?
Non-Renewal
Who most commonly makes an offer to enter into an insurance contract?
The applicant
This is the false statement made by an applicant on the application.
Misrepresentation
This is a contract between the insurance company and an individual and cannot be transferred or assigned to another party.
Personal Contract
Once a right has been waived it cannot be claimed in the future. This is known as what?
Estoppel
Some common exclusions listed are what?
Ordinance or law
Earth movement
Flood
Neglect
Intentional Loss
Nuclear Hazard
Government Action and Fungus
This is an amount paid to help share the risk.
Premium
This is an accident including continuous or repeated exposure to the same general harmful conditions
Occurrence
Written notice that someone has incurred a loss is called what?
This can broaden coverage under a new addition of the policy form with no premium increase.
Liberalization Clause
Policies that share losses by the ratio of applicable limits of insurance each insurer writes compared to the total of all limits available to the loss.
Pro Rata Liability
This is the amount of premium that has been already paid and will not be in place after cancellation
Unearned Premium
This means that a policy was cancelled because the insured failed to pay the premium.