Abandonment Condition - ANSWER A condition often contained in property insurance
policies that states that the insured cannot abandon damaged property to the insurer and
demand to be reimbursed for its full value.
Absolute Liability - ANSWER Type of liability imposed by law on those participating in cer-
tain activities that are coered particularly hazardous; person may be held liabile even though
they were not negligent.
Accident - ANSWER A loss that occurs at a specific time and place.
Accounts Recivable Insurance - ANSWER Filed commercial inland marine form that in-
sures against loss the insured suffers becuase of an inability to collect from customers when
accounts receivable records are damaged or destroyed.
Actual Cash Value (ACV) - ANSWER the cost to replace an item of property at the time of
loss, less an allowance for depreciation; ofter used to determine the amount of reimburse-
ment for a loss
Additional Coverages - ANSWER Supplemental Insurance coverages that apply only in cer-
tain circumstances, have reduced or separate limits of liability, or require the insured to
meet certain requirements before the y are applicable; also called coverage extensions,
other coverages, and extended coverages
Additional Insured - ANSWER An individual or company , in additiona to the insured, who
is listed in the declarations; an example is a mortgage company that has insurable intrest in
the property insured
1
,Additonal Insured-Lessor Endorsement - ANSWER commercial auto endorsement used to
make leased vehicles considered owned vehicles for coverage purposes
Adhesion Contract - ANSWER a contract where one party has more power than the other
party in drafting the contract; an insurance policy is an adhesion contract---the insurer is the
one with more power
Adverse Selection - ANSWER the tendancy of insureds with a greater-than-average
chance of loss to purchase insurance
Agency - ANSWER Principles governing the authority of any agent that represents a prin-
ciple
Agent - ANSWER an individual or organization that legally represents another; a state-li-
censed professional who prepresents the insurance company in the sale and servicing of in-
surance; the direct link between the insurance company and policyholder
Aggregate limit - ANSWER Type of policy limit found in liability policies that limits cover-
age to a specified tootal amount for all losses occuring within the policy period
Agreed Value Condition - ANSWER Condition found in some property insurance policies
that stipulates a certain value that will meet the coinsurance requirement
Aleatory Contract - ANSWER A contract that is contingent on an uncertain event (loss); an
insurance policy is an aleatory contract
Alien Company - ANSWER An insurance company incorporated in any other country
other than the United States that is doing business in the United States
A.M. Best Company - ANSWER Organization that rates the financial stability of insurance
companies doing businessin the United States
2
, Annual Transit Policy - ANSWER Nonfiled commercial inland marine transportation form
that insures property owner's incoming or outgoing shipments of goods during a year.
Apparent authority - ANSWER Legal doctrine that states that an agent has whatever au-
thority a reasonable person would assume she has
application - ANSWER questionaire filled out by an agent and the prospect who is seeking
insurance; the form contains information used to underwrite and rate the policy
Apprasial condition - ANSWER policy condition that outlines a procedure for when the
insured and insurer disagree on the amount of a loss; each party selects their own appraiser,
and the two appraisers selelct and umpire
Appurenant Sturctures - ANSWER Buildings of lesser value that are on the same
premsises as the main buliding insured unnder a property policy; they are usually covered by
the policy
Arbitration Condition - ANSWER Policy condition that is similar to the appraisal condition;
may be used to resolve other areas of disagreement besides those regarding loss of value
Assessment Mutual Company - ANSWER Mutual insurance company that charges mem-
bers a pro-rata share of losses at end of each policy perod
Assignment Condition - ANSWER when a policy may not be transferred to anyone else
without the written consent of insurer unless the named insured dies
Assumption of Risk - ANSWER a doctrine under which a plaintiff may not recover for inju-
ries or damage suffered from risks he or she knew of and voluntarily assumed
3
policies that states that the insured cannot abandon damaged property to the insurer and
demand to be reimbursed for its full value.
Absolute Liability - ANSWER Type of liability imposed by law on those participating in cer-
tain activities that are coered particularly hazardous; person may be held liabile even though
they were not negligent.
Accident - ANSWER A loss that occurs at a specific time and place.
Accounts Recivable Insurance - ANSWER Filed commercial inland marine form that in-
sures against loss the insured suffers becuase of an inability to collect from customers when
accounts receivable records are damaged or destroyed.
Actual Cash Value (ACV) - ANSWER the cost to replace an item of property at the time of
loss, less an allowance for depreciation; ofter used to determine the amount of reimburse-
ment for a loss
Additional Coverages - ANSWER Supplemental Insurance coverages that apply only in cer-
tain circumstances, have reduced or separate limits of liability, or require the insured to
meet certain requirements before the y are applicable; also called coverage extensions,
other coverages, and extended coverages
Additional Insured - ANSWER An individual or company , in additiona to the insured, who
is listed in the declarations; an example is a mortgage company that has insurable intrest in
the property insured
1
,Additonal Insured-Lessor Endorsement - ANSWER commercial auto endorsement used to
make leased vehicles considered owned vehicles for coverage purposes
Adhesion Contract - ANSWER a contract where one party has more power than the other
party in drafting the contract; an insurance policy is an adhesion contract---the insurer is the
one with more power
Adverse Selection - ANSWER the tendancy of insureds with a greater-than-average
chance of loss to purchase insurance
Agency - ANSWER Principles governing the authority of any agent that represents a prin-
ciple
Agent - ANSWER an individual or organization that legally represents another; a state-li-
censed professional who prepresents the insurance company in the sale and servicing of in-
surance; the direct link between the insurance company and policyholder
Aggregate limit - ANSWER Type of policy limit found in liability policies that limits cover-
age to a specified tootal amount for all losses occuring within the policy period
Agreed Value Condition - ANSWER Condition found in some property insurance policies
that stipulates a certain value that will meet the coinsurance requirement
Aleatory Contract - ANSWER A contract that is contingent on an uncertain event (loss); an
insurance policy is an aleatory contract
Alien Company - ANSWER An insurance company incorporated in any other country
other than the United States that is doing business in the United States
A.M. Best Company - ANSWER Organization that rates the financial stability of insurance
companies doing businessin the United States
2
, Annual Transit Policy - ANSWER Nonfiled commercial inland marine transportation form
that insures property owner's incoming or outgoing shipments of goods during a year.
Apparent authority - ANSWER Legal doctrine that states that an agent has whatever au-
thority a reasonable person would assume she has
application - ANSWER questionaire filled out by an agent and the prospect who is seeking
insurance; the form contains information used to underwrite and rate the policy
Apprasial condition - ANSWER policy condition that outlines a procedure for when the
insured and insurer disagree on the amount of a loss; each party selects their own appraiser,
and the two appraisers selelct and umpire
Appurenant Sturctures - ANSWER Buildings of lesser value that are on the same
premsises as the main buliding insured unnder a property policy; they are usually covered by
the policy
Arbitration Condition - ANSWER Policy condition that is similar to the appraisal condition;
may be used to resolve other areas of disagreement besides those regarding loss of value
Assessment Mutual Company - ANSWER Mutual insurance company that charges mem-
bers a pro-rata share of losses at end of each policy perod
Assignment Condition - ANSWER when a policy may not be transferred to anyone else
without the written consent of insurer unless the named insured dies
Assumption of Risk - ANSWER a doctrine under which a plaintiff may not recover for inju-
ries or damage suffered from risks he or she knew of and voluntarily assumed
3
