Offer and acceptance between parties
Premiums and representations from insured; payment of claims from insurer
Of legal age, sound mental capacity, not under the influence of drugs or alcohol
Must be for a lawful reason, not against public policy
Memory Trick: OACL
Offer + Acceptance | Assessment (Consideration) | Competent | Legal
Statements believed to be true to the best of one's knowledge, but NOT guaranteed to be true
Untrue statements that could void the contract
A statement that, if discovered, would alter the underwriting decision
An absolutely true statement that the policy depends on to be valid
Intentional withholding of a material fact that is crucial in making a decision - may void a policy
Basic underwriting info: name, address, coverage amounts, premiums, insured locations
Clarifies the terms used in the policy
Establishes insurer's obligation to provide coverage
Extra coverage for specific expenses, at no additional premium
General rules/procedures both parties agree to follow
Printed addendums to change terms, conditions, or coverages
Perils NOT insured against + maximum amounts insured may collect
Anyone covered under the policy, whether named or not
Individual(s) whose name appears on the declaration page
Individual whose name appears first on the declaration
Not named on declaration, but protected by the policy
Protect property
Inventory damaged property
Cooperate with insurer
Police (theft)
Submit proof of loss
Used when there's disagreement on the value of property loss
Used when parties don't agree on how to settle a claim
Termination of in-force policy before expiration date
Termination at expiration by not offering continuation
Under professional liability, insurer must get insured's consent before settling
Protects the interest of the lender in mortgaged property
Form informing insurer that events leading to possible claim have occurred
Sworn statement that must be furnished before loss can be paid
Defines how policy responds if other valid insurance exists on same risk; Pro rata provides for sharing of loss
Application Form
Motor Vehicle Records
Interviews
Property Inspection
Insurance History
Appraisal
Disagreement on VALUE
Arbitration
Disagreement on HOW to settle
Earned Premium
Portion insurer has "earned" for elapsed time
Liberalization
Improved coverage is automatic & free
Negligence
Failure to use reasonable care
Third Party
Anyone other than insured or insurer
Appraisal vs Arbitration: Appraisal = VALUE dispute. Arbitration = HOW to settle dispute.
Notice of Claim vs Proof of Loss: Notice = "something happened." Proof = sworn statement with details.
Cancellation vs Nonrenewal: Cancel = BEFORE expiration. Nonrenewal = AT expiration.
Warranty vs Representation: Warranty must be ABSOLUTELY true. Representation = believed to be true.
Consumer vs Investigative Report: Consumer = credit/claims data. Investigative = interviews with people.
You've mastered Policy Provisions and Contract Law. Ready to continue?
Continue to Chapter 3 →