P/L Insurance Concepts
This presents a chance of a financial loss
Risk
When these are found in a policy, they are in favor of the insured
Ambiguities
This increases the chance of a loss
Hazard
This refers to economic loss because of direct loss
Indirect loss
Actual cost value (ACV), FL Valued Policy Law, Replacement cost, and Agreed value
Ways a claim can be settled
This is referred to as temporary Insurance
Binder
This involves someone having the possibility to suffer economic loss
Insurable interest
This is an intentional loss and conscious mental attitude
Moral hazard
This is physical harm to tangible property, damage to covered real/personal property caused by covered peril, "show me the damage!"
Direct loss
Replacement cost - depreciation
Actual cost value (ACV)
This is a type of risk that is insurable and presents either loss or no loss
Pure risk
This is the max amount that the insurer will pay on behalf of insured
Limit of Liability (LOL)
This is an unbroken connection between covered occurrence and damage from occurrence
Proximate cause
This is damage to other property due to direct loss
Consequential damage
This settlement is New for Old, like kind and quality
Replacement cost (RC)
This is a statistical concept where as the number of policyholders increases, the more confident the insurance company will be that its prediction will be proven true
Law of Large Numbers
This is the term for an insurance carrier not licensed in their respective state
Non-admitted/Unauthorized Carrier
Fire, lightning, wind, hail, etc.
Perils
This damage to my auto from a tree is considered this
Direct loss
This settlement is where the Insurer agrees in advance to stated amount
Agreed value
Dec page, coverages, exclusions, conditions, provisions, clauses, insuring agreement, endorsements, and riders
Parts of a policy
This is insurance for insurance companies
Reinsurance
This is accident proneness, unconscious mental attitude, careless clients, and negligence
Morale hazard
This loss of income due to damage to my auto is considered this
Indirect loss
This is not a departure from indemnification
Actual cost value (ACV)