Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
20 Cards in this Set
- Front
- Back
Risk |
Chance of financial loss to which an object of insurance is exposed. |
|
Speculative risk |
The chance of a financial loss or gain. |
|
Pure risk |
The chance of financial loss but no chance of financial gain. |
|
Insurance |
The undertaking by one person to indemnify another person against loss or liability for loss in respect to a certain risk or peril. Or to pay a sum of money or other thing of value upon the happening of a certain event. |
|
Contract |
An agreement between two or more persons which creates an obligation to do or not do a particular thing. |
|
Consideration |
An exchange of something of value between parties. |
|
Insurable interest |
One has an insurable interest in the subject matter of the insurance when they will suffer financially by a loss. |
|
Utmost good faith |
The law requires insurance contracts maintain a higher standard of honesty than is needed of other contracts. Applies to insured, insurer and broker. |
|
Indemnity |
Application of the principle of indemnity ensures people receive the actual amount of their loss, no more and no less. |
|
Insurance binder |
A temporary agreement in which the insurer agrees to provide certain coverages pending the issuance of a policy. |
|
Agency agreement |
A written agreement or contract between the insurer and brokerage which acknowledges their relationship. |
|
Void contract |
One which is unable in law to support the purpose for which it was intended. Such contracts are deemed to never have existed.
|
|
Voidable contract |
A contract that may be voided at the option of the wronged party only and not the wrongdoer. |
|
Peril |
The cause of a loss. |
|
Direct loss |
Occurs when the peril insured actually attacks the object of insurance. |
|
Indirect loss |
Losses which arise as a consequence of a direct loss. |
|
Actual cash value |
New or replacement cost of the property, at the time of the loss, less depreciation |
|
Valued policy |
Both the insured and the insurer agree at the time the policy is issued as to the cash value of the property. In the event of a loss, the agreed amount is paid. |
|
Blanket coverage |
Policy which provides a single limit of insurance for all property falling within a specific class. |
|
Scheduled coverage |
Covered property is itemized on the policy
|