INSURANCE TERMS
Updated: 2/8/2020
INSURANCE TERMS
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Storyboard Text

  • Flood
  • Fire
  • These are all RISK that can be covered by insurance.
  • There are so many things that could happen to my home.
  • WIND
  • WINDSTORM
  • Fire
  • The cause of loss is a PERIL
  • Flood
  • WIND
  • Living near the ocean is a HAZARD. A hazard increases the probability of a loss
  • Actual $$$ lost because of a claimECONOMIC LOSS
  • Insurance Policies provide INDEMNITY (PAYMENT) for a loss that has already occurred
  • FUNCTIONAL REPLACEMENT COSTthe amount to purchase an item that is not identical but has the same function
  • This is my house that I legally own. I have an INSURABLE INTEREST in this house.
  • Amount to make repairs $23000DEDUCTIBLE <$1000>Amount of check $22000Amount that insurance company will deduct from your check. This amount is your responsible to pay. This is you DEDUCTIBLE
  • DIRECT LOSS VS INDIRECT LOSS
  • INDIRECT LOSS results from the occurance of a direct loss. Additional living expenses since you cannot live in your home.
  • DIRECT LOSS is a financial loss that results from the damage, destruction or theft of property such as fire damage to a home
  • NAMED PERILS VS OPEN PERILS (ALL RISK)
  • OPEN PERILS OR ALL RISKS polices cover all perils unless they are specifically excluded in the policy
  • NAMED PERILS policies only cover the perils specifically listed in the policy
  • EXCLUSIONS:ITEM 1ITEM 2ITEM 3
  • SPECIFIC VS BLANKET COVERAGE
  • BLANKET COVERAGE Policy covers many items that are not specifically listed in the policy
  • SPECIFIC COVERAGE covers only one or a list of individual pieces of property
  • REPLACEMENT COSTamount to actually replace the covered property
  • ACTUAL CASH VALUE1. cost to repair or replace minus depreciation2. fair market value
  • SALVAGE VALUE is the amount an item is worth even after it's totaled. This amount is deducted from the amount paid if an insured retains the salvage.
  • MORTGAGEEClause on a policy that allows the bank to be paid in the event of a total loss. Bank must also alert an insurance company in the even of change of ownership or occupancy that affects the exposure on the house.
  • Other interests that can be listed on a policy
  • LOSS PAYEEClause on a policy for the bank that finances a car or some other type of equipment. Makes sure they get paid in the event of a total loss.
  • ENDORSEMENTForm that either changes the provisions of the policy.They can broaden, restrict, add locations or parties, modify insuring agreement of policy definitions, or exclustions.
  • MISREPRESENTATIONFalse or misleading statement that can allow a company to void an insurance policy
  • CONCEALMENTwillful holding back of information, even if not specifically asked. Policy can be voided for this.
  • NO LIES
  • BREACH OF WARRANTYa lienholder's endorsement that protects their interest even if a contract is voided because of a breach. Only the lienholder will get paid in the event of a loss.
  • BANK GETS THIER MONEY
  • NEGLIGENCEfailure to use a degree of care under a set of circumstances. LIABILITY policies are designed to cover acts of negligence
  • DECLARATION PAGE
  • SUPPLEMENTARY PAYMENTScosts associated with with the investigation and resolution of claims. Expenses of the insured and attorney fees may be supplementary payments. They may or may not reduce the coverage limit
  • PERSONAL INJURYharm other than bodily injury. For example, malicious prosecution, slander, libel, invasion of privacy.
  • BODILY INJURY Bodily harm, sickness, or disease including death.
  • PROPERTY DAMAGEphysical damage to tangible property included the loss of use of proerty
  • SINGLE - single limit that covers combination of bodily injury and property damage500,0001,000,000
  • LIABILITY LIMITS
  • SPLIT - limit that divides the following.bodily injury per person/bodily injury per total accident/property damage100/300/100250/500/250
  • CERTIFICATE
  • BINDERDocument provided as temporary evidence of insurance until a policy can be issued
  • PROOF OF INSURANCE TYPES
  • CERTIFICATEDocument that provides evidence of insurance limits that have been purchased by the person required to furnish the certificate
  • BINDER
  • LIBERALIZATION CLAUSEProvision that extends to persons insured under the policy under a policy that broadened coverage that may be introduced in subsequent editions of the policy
  • A declarations page, is a document that lists details of your policy, including:Your name and any other individuals covered by the policyYour insurance agentYour mortgage lenderYour home’s physical addressYour policy numberThe type of policy it is (e.g., HO-3)The limits you select for each coverage A-FAny additional endorsementsYour deductibleYour yearly premiumAny discounts applied to your premiumThe dates the policy is in effect
  • INSURING AGREEMENTSPortion of the policy where insurer promises to make payments on behalf of an insured. Usually broad in scope and narrowed by exclusions and definitions.
  • DEFINITIONS - Terms and phrases used in the policy that have very specific meanings. The policy alerts ready to when a definition is used so they can refer to the definitions listed in the policy.
  • CONDITIONS - section that gives requirements of the insured such as loss reporting, settlement, property valuation, other insurance, subrogation rights, cancellation and non-renewal.
  • NOT COVERED
  • EXCLUSIONS/WAIVER - usually contained in the coverage form. Refers to hazards, perils, circumstances, or property not covered.
  • RULES FOR THE INSURED
  • APPLICATIONForm that provides insurer with info to underwrite a given risk. Applicant must complete to receive insurance
  • INSURANCEInsurer accepts premium from an insured and agrees to pay insured for losses that occur causes by certain hazards or perils.
  • Insurance is a contract of ADHESION. Insurance company has the right to accept of reject with no bargaining about the wording
  • SUBROGATION - assignment of an insurer that gives the rights to recover an amount of loss from the person legally liability for it.
  • CONSENT TO RATEWhen a company charges you more money that what they are allowed by the NC Rate Bureau with or without your authorized consent. They can charge up to 250% more than authorized rate.This is normally done due to a underwriting condition that provides an increased risk so the insurance company charges an incrased premium.
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