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P&C Insurance
property and casualty
| Term | Definition |
|---|---|
| Claim | The demand for payment from the insurer following a covered loss. |
| Exposure | Any condition or situation that could lead to a loss. The potential for financial loss. |
| Hazard | A condition that increases the chances of loss. |
| Indemnify | To restore someone to the same financial position at which they existed before the loss |
| Law of Large Numbers | Mathematical principle used to predict losses |
| Insurance | Transferring risk from an individual or business to an insurer |
| Insurance Policy | A legal contract used to transfer risk. |
| Insured | The party transferring risk to an insurer |
| Insurer | The party accepting the transfer of risk from another |
| Legal Liability | Responsibility for injury to another person or their property |
| Loss | Any reduction in the quantity, quality, or value of something. |
| Loss of Use | When damage to real or personal property causes a financial loss because the real or personal property cannot be used. |
| Moral Hazard | When the chance of loss is increased because of the insured's attempt to gain from insurance |
| Morale Hazard | When the chance of loss is increased because of the insured's attitude toward safety. |
| Personal Property | All property other than real property ie., household furnishings, business inventory, boat, watercraft. |
| Peril | Something that causes loss ie., fire wind, hail |
| Physical Asset | Real or personal property |
| Physical Hazard | When the chance of loss in increased by the construction, use or location of the property. |
| Pure Risk | Risk that only involves the possibility of loss only |
| Real Property | Buildings or other structure ie., house, garage, fence |
| Risk | Financial uncertainty of loss |
| Terrorism Risk Insurance Act (TRIA) | Law passed to create a federal backstop for property and casualty insurance claims related to acts committed by foreign interest |
| Insurable Interest | Based on a person's legal right to the preservation of the property |
| Speculative Risk | There is a possibility of gain or loss ie., gambling, purchasing stock |
Created by:
prettylavish88
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