 |
||
Quick LinksPolicy Holder?Pay by Phone:
(800) 937-3965 |
Glossary of Termsi Impaired Insurer An insurer which is in financial difficulty to the point where its ability to meet financial obligations or regulatory requirements is in question. Implied Authority Authority of an agent that the public may reasonably believe the agent to have. If authority to collect and remit premiums is not expressly granted in the agency contract, but the agent does this on a regular basis and the insurer accepts, the agent has implied authority. Incurred But Not reported Refers to losses which have occurred during a stated period, normally a calendar year, but have not yet been reported to the insurer as of the date under consideration. Insurance company statements prepared after the end of a calendar year would have to include an estimate of losses that occurred during that year but have not yet been reported. Indemnify To restore the victim of a loss to the same position as before the loss occurred. Indemnity Restoration to the victim of a loss by payment, repair, or replacement. Independent Adjuster An adjuster who works as an independent contractor, hiring himself out to insurance companies or other organizations for the investigation and settlement of claims. Independent adjusters represent the interests of insurance companies. Insurable Interest Any interest a person has in a possible subject of insurance, such as a car or home, of such a nature that a certain happening might cause him financial loss. Insurable Risk A risk that meets most of the following requisites: 1Loss insured against must be capable of being defined 2It must be accidental 3Must be large enough to cause the insured hardship 4Must belong to a homogeneous group large enough to make losses predictable 5Must not be subject to the same loss at the same time as a large number of other risks 6Insurer must be able to determine a reasonable cost for the cover 7Insurer must be able to calculate the chance of loss Insurance A formal social device for reducing risk by transferring the risks of several individual entities to an insurer. The insurer agrees, for a consideration, to assume, to a specific extent, the losses suffered by the insured. Insurance to Value Insurance written in an amount approximating the value of the property insured. Insurer The most desirable word for describing without ambiguity to all types of organizations performing the insurance function. The party to an insurance arrangement who undertakes to indemnify for losses, provide pecuniary benefits, or render services. Insuring Agreement That portion of an insurance contract which states the perils insured against, the persons and/or property covered, their locations, and the period of the contract. j Joint Venture This expression is applied most often to construction ventures where several contractors agree to combine on a project rather than to act as separate contractors. Under the joint venture agreement, they share profits and losses in some agreed-upon proportion. k Kenney Ratio A rule proposed by Roger Kenney which suggests that to insure solvency, property and liability insurers should not write insurance premiums equal to more than twice their capital and surplus. l Lapse Termination of a policy because of failure to pay the premium. Law of Large Numbers This law states that the larger the number of exposures considered, the more closely the losses reported will match the underlying probability of loss. The simplest example of this law is the flipping of a coin. The more times the coin is flipped, the closer it will come to actually reaching the underlying probability of 50% heads and 50% tails. Loss Generally refers to (1) the amount of reduction in the value of an insured’s property caused by an insured peril, (2) the amount sought through an insured’s claim or (3) the amount paid on behalf of an insured under an insurance contract. Lost Policy release A statement signed by the insured releasing the insurer from all liability for a lost or mislaid contract of insurance. |
|