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220 License Test Prep

Definitions
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Side ASide B
Risk
Chance of Financial Loss
Policy
Written contract effecting insurance 
Insurance 
A contract where one indemnifies another.
Binders 
Temporary Insurance- Oral or Written & includes all terms of the policy 
Contract of Adhesion
Contract created by insurance company- insured cannot negotiate terms.
Personal Contract
Cover persons- not property
Conditional Contract 
The obligation of the insurer may be based on insured satisfying certain conditions.
Indemnity
One should not profit. Actual Cash Value: replacement cost less depreciation
Departures
Replacement Cost: New for OldFlorida Value Policy Law: If total...
Insurable Interest 
One who would suffer an economic loss/pays% of loss to value of interest. Must exist at the...
Peril
Cause of a loss
Hazardex's: Old Plumbing, Frame Houses, Trampoline, Slides, etc.
Increased the chance of the lossPHYSICAL: Physical characteristic of an objectMORAL:...
Proximate Clause
Unbroken connection between an occurrence and the damage
Direct Loss
Physical harm to tangible property (Vehicle in accident)
Indirect Loss
Economic Loss as a consequence of Direct Loss (Rent Vehicle due to accident)
Lenders Interest
Mortgage Clause/Loss Payable Clause (loss payee): 1- Gives MTG advance notice of cancellation/nonrenewal 2-...
CoInsurance
Did                        ...
Specific Insurance
Separate limit for each building and contents
Blanket Insurance
Single amount of two or more coverage items- full amount to any one item.
Deductibles
Straight: Deduct flat amount from loss paymentFranchise: Pay from...
Subrogation
When insurer pays the insd for loss, rights are transferred, insurer may seek damages from...
Assignment
Cannot transfer policy to another without company's permission.
Other Insurance 
Primary: Policy pay firstExcess: Primary policy must be exhausted,...
Liberalization
Broaden coverage, without additional premium
Appraisal
Determines value of property without legal action. Insd hires an independent appraiser and...
Abandonment
Insd cannot dump damage property and request full value of property.
Negligence
Failure to act as a prudent person would have in the same circumstances.
Legal Liability
Comparative Negligence- defendant asserts that the plaintiff in some way contributed...
Severability of Interest
Insurance applies separately/equally to each insd. Ex: Husband and wife

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