Foundation Knowledge for Property Insurance
Before learning about different types of insurance policies, you need to understand some basic terminology and concepts. This chapter builds the foundation of knowledge that makes it easier to learn the rest of the material in this course.
Why This Matters
Master these ideas before moving on - they're referenced throughout every other chapter!
Reduction in value, particularly due to wear and tear
Susceptibility to risk
A legal term meaning a product is suitable for its intended purpose and fits an ordinary buyer's expectations
A contract between a policyowner and insurer agreeing to pay for loss caused by specific events
The company who issues an insurance policy
Depreciation in property value due to becoming outdated
The money paid to the insurance company for the insurance policy
A wrongful act or violation of someone's rights that leads to legal liability
Insurable Interest, Risk, Perils, Hazards, Indemnity, Subrogation
Accident vs Occurrence, Direct/Indirect Loss, Named/Open Peril, Negligence
Actual Cash Value (ACV), Replacement Cost, Market Value, Stated Value
Absolute, Strict, Vicarious Liability; Limits of Liability (Per Occurrence, Split, Combined)
Proximate Cause, Deductible, Coinsurance, Insurance to Value, Deposit Premium
Complete summary of all concepts and key formulas
Insurance Fundamentals
Transfer of risk, insurable interest, pure vs speculative risk
Causes of Loss
Perils, hazards (physical, moral, morale)
Key Principles
Indemnity, subrogation, proximate cause
Valuation Methods
ACV, replacement cost, market value