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Insurance Terms

A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z

A

Agent
An insurance agent works for only one company and sells policies only for that insurer.

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B

Bailee for Hire
One who has temporary possession of personal property of others for a purpose other than sale and who is compensated for caring for it.

Binder
A written or oral agreement from the insurer giving temporary protection to an insured pending issue of the policy.

Bodily Injury
Generally defined in liability policies to mean bodily injury, sickness or disease sustained by a person, including death resulting from any of these at any time.

Broker
One who is an independent middleman (not tied to a particular insurance company) who obtains insurance for his clients from insurance companies or their brokers.

Burglary
Generally defined as the unlawful taking of property from within the premises by a person unlawfully entering or leaving the premises, as evidenced by marks of forcible entry or exit.

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C

Commission
Sum paid as remuneration to the broker for business placed with an insurer.

Condition
A condition imposed upon an insured under the policy required them to do or not to do something during the term of the policy.

Condominium
A system of separate ownership of individual units in a multiple-unit building.

Consideration
In a contract, an exchange of something of value between the parties.

Contract
An agreement between two or more parties that is enforceable at law.

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D

Damages
An amount of money awarded to the person injured by another’s tort or wrongdoing.

Deductible
The specific dollar amount or percentage of the insured value to be paid by the insured before he is entitled to recovery from the insurer.

Disability
When used in Accident and Sickness Insurance, a physical or mental inability to work.

Dwelling
The building occupied as a private residence.

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E

Endorsement
Acknowledges a change in the terms of the contract.

Ethics
Relating to moral character. Conforming to professional standards or conduct.

Exclusion
Provision specifying the situations, occurrences or persons not covered by the policy.

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F

Fiduciary
One who manages money or property for another.

Fire
The loss of property due to ignition or burning.

Floater
Insurance document used to provide coverage for property having a high degree of mobility.

Forthwith
Without delay. The words “forthwith” and “immediately” convey the same meaning.

Fraud
A deliberate attempt to deceive, with a view to securing some profit.

Friendly fire
Fire contained to the place it is supposed to be, eg. Fire in a fireplace, etc.

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H

Hazard
A condition that may cause a peril to occur.

Hostile Fire
One that becomes uncontrollable or breaks out from where it is intended to be and becomes a hostile element.

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I

Indemnity (Principle of)
Insurance principle that aims to ensure the victim of a loss receives the actual amount of the loss, no more and no less.

Insurable Interest
People have an insurable interest when they are able to show they would suffer financially from a loss a requirement of insurance contracts.

Insurance
The undertaking by one person to indemnify another person against loss or liability for loss in respect of a certain risk or peril to which the object of insurance may be exposed…or to pay a sum of money or other thing of value upon the happening of a certain event.

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L

Loading
The rate over and above the fire rate charged by the insurer to provide additional policy coverages.

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M

Material Fact
A fact which, if the insurer knew about it, would cause it to decline the insurance altogether or charge a higher premium for accepting it.

Minimum Retained Premium
The minimum amount of premium an insurer will retain in the event the policy is cancelled before its expiry.

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N

Negligence
Failure to use that degree of care which an ordinary person of reasonable prudence would use under the give circumstances.

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P

Partial Loss
A loss under and insurance policy that does not either completely destroy or render worthless the insured property, or that does not use up the insurance limits applying to it.

Payee
One to whom insurance monies are payable in the event of a loss to insured property.

Peril
The cause of the loss.

Premises
The land contained within the lot lines.

Premium
The money or consideration paid by the insured to the insurer for insurance protection.

Private Protection
Refers to the things a person has done internally to prevent or reduce loss.

Property Damage
In commercial liability insurance policies, generally defined as “physical injury to tangible property, including all resulting use of that property; or loss of use to tangible property that is not physically injured.”

Public Protection
Refers to the protection provided to insured property from outside sources.

Pure Risk
Involves the chance of financial loss with no chance of financial gain.

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R

Rebate
Discount or reduction in stipulated premium of a policy, generally by broker or broker and intended as an enticement.

Relative
One person connected to another by blood or affinity.

Repair
The act of restoring a damaged structure or thing to a condition as close as possible to that which originally existed.

Replacement Cost
The cost of replacing, repairing, constructing or reconstructing, whichever is the least, the property on the same site with new property of like kind and quality and for like occupancy without deduction for depreciation.

Retention
Refers to “self-insurance”; a means of generation funds from within the organization to pay for losses.

Rider
Adds additional coverages to the existing contract.

Risk Control
A risk management technique concerned with taking measures to reduce the frequency and severity of losses.

Risk
The chance of financial loss to which the object of insurance may be exposed.

Robbery
Felonious taking of property from the possession of another against his will, accomplished by means of force or fear.

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S

Subrogation
Refers to the lawful substitution of a third party in place of a party having a claim against another party. In insurance contracts, the insurer has the right to “step into the shoes” of another party whom it has compensated and sue any party whom the compensated party could have sued.

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T

Theft
The taking of property without the owner’s consent.

Third Party
One who is not a party to the insuring agreement but who might have rights therein.

Tort
A legal wrong, other than the breach of contract, for which the court will provide a remedy in the form of a suit for damages.

Tortfeasor
One who commits a tort; a wrong-doer.

Total Loss
Complete destruction of insured property.

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U

Underwriters
(a) The one assuming the risk in return for payment of a premium.
(b) The person within the insurance company authorized to accept or reject applications for insurance.

Utmost Good Faith
A requirement of insurance contracts; implies complete honesty, concealing nothing.

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V

Valued Policy
One in which the insured and insurer agree as to the value of property insured in advance of any loss to it, such amount to be paid in the event of a total loss of the covered property.

Void
Having no legal force or binding effect.

Voidable
That which is capable of being declared void.

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W

Waive
To voluntarily give up a right.

Waiver
The unilateral and voluntary relinquishment of a known right.

Warranty
A promise that certain facts are truly as they are represented to be and that they will remain so.

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